CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

You’ve first got to argue with a straight face that en banc review is necessary either to maintain “uniformity of the court’s decisions” or to address a “question of exceptional importance”. If you can get past that hurdle, you’re still not home. The court isn’t obligated to give you the time of day unless at least one judge calls for a vote as to whether or not the case should be heard en banc. If such a call is made, then all the judges vote and, if a majority supports en banc review, the en banc process kicks in. That process entails another round of briefs and oral argument presented to all the judges on the particular circuit in question. Usually, but not invariably, the panel’s judgment gets vacated once the full court decides to review it en banc.]

According to the broadcasters’ petition, the decision allowing Aereo to keep operating “will wreak commercial havoc by allowing new and existing distributors to design around [the requirement to get a license] and profit from the delivery of copyrighted programming while paying nothing for it.” If that’s not dire enough for you, they also claim that the decision could cause “the entire retransmission licensing regime” to be “swallow[ed]”.   The swallowing (according to the petitioners) will occur thanks to Aereo-like set-ups supposedly being contemplated by Time Warner Cable and Dish Network, and the recent statements made by one of their own – Newscorp COO Chase Carey’s threat to convert the Fox Network to a subscription-based cable channel.

The broadcasters’ petition presents a two-fold attack. 

First, it argues that the panel’s 2-1 ruling misinterprets the Copyright Act. This argument depends to a great degree on linguistic subtleties, like whether the terms “transmission” and “performance” were intended by Congress to mean the same thing. According to the petition, the Act clearly contemplated that “‘transmissions’ and ‘performances’ are not the same thing” – “the ‘performance’ is the thing that is communicated and the transmission is the means of communicating it.” This, of course, is a distinction made by dissenting Judge Denny Chin in the earlier Aereo decision. (Oh yeah, it’s also a distinction made by the United States District Court for the Central District of California in the AereoKiller case.) It is likely to be the predominant legal issue when the case is ultimately resolved (with the predominant – and only – factual issue being whether Aereo can actually do what it claims with just one antenna per subscriber).

But the challenged interpretation of the Copyright Act itself derived from the Second Circuit’s 2008 Cablevision decision on which Aereo relies to justify its operations as legal. So in a separate section the broadcasters’ petition takes dead aim on the rationale of the Cablevision decision as well.

As the broadcasters see it, Cablevision was based on a “false premise” and the earlier decision in Aereo compounds the error in several ways.

The three-judge Cablevision panel’s decision was based in large measure on the notion of a hypothetical “hapless customer” who wanted to use the Cablevision remote DVR service to record a program in his den but play it back in his bedroom. The Cablevision panel concluded that that consumer wasn’t engaging in a public performance.  Within the context posited by the panel, the broadcasters agree with its conclusion: “a subscriber who records a program in his den and watches it in his bedroom is not transmitting the program to the public; he is transmitting it to himself”.   

But, say the broadcasters, that’s not the case with Aereo’s system, which doesn’t simply involve one person retransmitting to himself. Rather, third parties are involved; it’s important to focus on who transmits and who receives a given performance.

The Petition also homes in on Cablevision’s notion that aggregation of individual transmissions could create a public performance only if they came from a single master copy. But, the broadcasters observe, the all-important Transmit Clause in Section 117 of the Copyright Act says nothing about master copies. The broadcasters argue that “a far better reading of the Transmit Clause would aggregate all transmissions of the same performance of a work by the same transmitter to members of the public, treating them collectively as a public performance regardless of whether the source is one or many copies.” Under this interpretation, Aereo, ivi, cable systems, and satellite services would all require a license. 

Having thoroughly beaten up on the Cablevision rationale, though, the broadcasters stop short of arguing that that decision should be discarded.  In a deft pirouette, they urge that “[w]hile the reasoning of Cablevision . . . needs to be rejected, that does not mean there cannot be private performances.” In other words, the petitioners are willing to concede that the result in Cablevision was correct – that is, the “hapless customer” should be permitted to record a program in his den and watch it in his bedroom without incurring the wrath of the Copyright Police. But the path by which the Cablevision court reached that result was flawed. We’re guessing that this delicately crafted argument is intended to attract the broadest possible support across all the Second Circuit’s judges, including those who would prefer not to overrule the Cablevision case.

So, what now? We sit back and wait to see whether the Second Circuit agrees to en banc review. If it doesn’t, the case stays in its current posture: Aereo can continue to operate while the trial of the broadcasters’ claims proceeds before the district court. If the Second Circuit takes the en banc appeal, in all likelihood Aereo’s operation will be stopped pending the outcome of that process. 

But regardless of how any of this turns out, we still think it’s likely that the underlying copyright issue here will eventually be resolved either by the Supreme Court or by Congress. The issue is already in play in both the Second Circuit, with the Aereo case, and the Ninth Circuit, with the AereoKiller case. And, since Aereo is promising to roll its service in more markets in the near future, it’s entirely possible that other cases will be brought in other circuits as well. Obviously, the issue has national implications demanding a uniform, national, resolution. Check back here for updates.

There are a number of factors to consider here. First, the Second Circuit’s decision – while densely analytical, thoughtfully reasoned, and ultimately favorable to Aereo – was not unanimous. The dissenting opinion, as it turns out, was also analytical (although somewhat less densely so than the majority’s) and thoughtfully reasoned. And anyway, the majority opinion was at most an interlocutory (i.e., intermediate) holding in one isolated piece of litigation in one federal circuit. That case has a long way to go before we can put it in the finito file. And there’s already at least one other case, involving Aereokiller, working its way through the federal courts in California (that would be in the Ninth Circuit), where at least one court hasn’t been kind to Aereo-like arguments.

So while the latest Second Circuit decision may not be the happiest of news to broadcasters, it’s far from the end of the line. Which makes Fox’s reaction to it a bit puzzling.

If you’re new to Aereo and other MVPD wannabes, take a minute and check out our previous posts about Aereo, ivi TV, FilmOn.com and Aereokiller. 

When last we left Aereo – a company which offers subscribers the opportunity to access over-the-air programming via the Internet – it had convinced a federal District Judge in New York not to enjoin it from continuing operation while copyright infringement lawsuits against it proceed. An injunction would likely have been a death sentence to the fledgling service, so the denial of the injunction was viewed as a set-back for the broadcasters who were looking to send Aereo to the showers in the early innings. The broadcasters appealed the decision to the Second Circuit, where they lost in the recent 2-1 decision.

The majority opinion in the Circuit, authored by Judge Christopher Droney (a relative newby on the Circuit, having joined the court in December, 2011), examined the tangled web of copyright laws, judicial decisions and technological developments at work here. Since the most recent overhaul of the Copyright Act happened back in the mid-1970s while technology has obviously advanced well beyond mid-1970s standards, trying to apply the former to the latter is not an easy task. 

In crafting his opinion, Droney was able to rely extensively on the Second Circuit’s 2008 decision in the Cablevision case. (Note the date: Cablevision was decided several years before Droney made it to the court; Droney did not participate in Cablevision.)   In Cablevision, the court had concluded that a cable system’s remote storage DVR service did not constitute copyright infringement. While the RS-DVR system is not perfectly analogous to Aereo’s technology, the earlier Cablevision decision provided Droney with at least some helpful guideposts for framing his analysis.

But hold on there. Judge Denny Chin, the dissenter, was no stranger to the Cablevision case. In fact, he had written the 2007 District Court decision that the Second Circuit had reversed in Cablevision. (Chin was elevated from the District Court to the Court of Appeals in 2010.) So it’s safe to say that he is familiar with the law in this particular area, including particularly the niceties of the Cablevision decision. It’s also safe to say that Judge Chin does not agree with Judge Droney’s analysis.

And the third judge on the panel? He happened to be another District Court judge, sitting “by designation”. While that doesn’t mean he’s dumb by any means, it does mean that he did not have the in-depth personal familiarity with the Cablevision case that Chin had.

As a result, it’s hard to view the most recent 2-1 panel decision as absolutely conclusive of anything. At most it reflects the complexity of the subject matter and the difficulty of resolving the issues presented by Aereo and its kin. Yes, the decision affords Aereo some breathing room in which to continue to try to get traction in the marketplace. But that’s about all.

Bear in mind, too, that the Second Circuit’s recent decision related only to the question of a preliminary injunction, i.e., an attempt to halt Aereo’s operation until the trial court can hear all the evidence and arguments and resolve the question of Aereo’s legality on its merits. The actual trial on the merits of the broadcasters’ claims of infringement has not yet happened. It’s at least theoretically possible that, having picked up some cues during the arguments relative to the preliminary injunction, the broadcast plaintiffs will be able to improve their arguments in the merits phase of the proceeding.

For example, at trial it may turn out that Aereo’s supposed system – i.e., one antenna per each subscriber – doesn’t work exactly as described. Within the analytical framework of Judge Droney’s analysis, that could be bad news for Aereo.

And let’s also not forget that, once the trial is over, the losing party will be entitled to appeal – to the Second Circuit and, ultimately, possibly even to the Supreme Court. That process is likely to take several years and will obviously afford plenty of opportunities for all parties to make all conceivable arguments. Need we point out that, once a case gets to the Supreme Court, anything can happen?

Meanwhile, the Aereokiller litigation is likely to be chugging along in California. Aereokiller, of course, is a video delivery system very similar to Aereo’s. But as we have previously reported, in the California case (where broadcasters have sued Aereokiller), the trial judge has granted a preliminary injunction. If the tide in the California litigation continues to run in that pro-broadcaster direction, we could easily find ourselves with the classic “circuit split” – i.e., a situation in which two federal circuit courts of appeals (in this case, the Second Circuit in New York and the Ninth Circuit in California) stake out inconsistent positions relative to a particular set of legal questions. A circuit split often leads the Supreme Court to step in to resolve the circuits’ differences.

And the Ninth Circuit may not be the only one eventually involved here.  Aereo has announced plans to roll out its service in 22 other markets across the country.  Broadcasters in each of those markets might also opt to get in on the litigation fun by filing their own infringement actions.  The more the merrier!  And the more different federal circuits that get involved, the greater will be the likelihood of a circuit split.

One other wild card prospect: Congressional intervention. The source of much of the controversy here is the Copyright Act, which Congress could amend, if it wants to.

The bottom line here, then, is that the Second Circuit’s recent decision is clearly not the bottom line here. While it does constitute, for broadcasters, the undesirable loss of an arguably important skirmish, it is not the loss of the battle, much less of the war.

Which brings us back to Fox and its dramatic reaction to the Second Circuit’s decision. What are we to make of that? Was it an over-reaction? An attempt to rally the broadcasting troops (think Mel Gibson in Braveheart, or maybe John Belushi in Animal House)? A calculated effort to disguise, as a frustrated response to the Second Circuit’s decision, some already-in-the-works  strategy to exit over-the-air broadcasting? We have no idea. But we are confident that the folks at Fox are no dummies, and they appear to have some very definite notions of where they’re going here. For sure, the suggestion that Fox might bail out of the OTA universe sparked a firestorm of interest in Aereo, copyright, and the Second Circuit. We’ll try to keep on top of developments. Check back here for updates.

Now that the U.S. Supreme Court has denied ivi’s bid for “certiorari” (the high-falutin, legalese term for an appeal to the High Court), it’s looking more like ivi may be exiting the marketplace.  Granted, the Courts to this point have ruled only on the issue of the preliminary injunction, so the case is technically not done – thus far ivi has been told only that it can’t operate pending the outcome of the full lawsuit on the merits.  But things aren’t looking good and that’s usually the death knell for many start-up companies. 

Let’s be clear that I am not reveling in any of ivi’s misfortune.  I distinctly appreciate and support innovation and have argued that Congress and the Copyright Office should consider changing the relevant laws to create a place at the video distribution table for ivi and its brethren. But let’s face facts.  ivi hasn’t operated in about two years, and it’s hard to see how ivi could have raised revenue to keep the fight going; one also has to wonder whether it’s been able to attract funders to its cause in the face of repeated judicial defeats.

Lacking the nutrients necessary for any business to survive, and facing the toxicity of multiple losses on the judicial front, ivi may simply wither away like so many innovators before it.

But even if ivi does wither, other contestants remain in the video-delivery-by-Internet race.  Ivi’s legal theory was, for instance, distinct from the theory underlying approach taken by Aereo and its quasi-twin, AereoKiller. As our readers know, though, that latter approach has received mixed reactions in court, with Aereo preliminarily succeeding while AereoKiller not so much.

We could be on a direct path to the Supreme Court.  (Quick, someone get the Swami! Oh, wait, that’s me!).

Like Aereo, Aereokiller was sued by virtually every major broadcast network soon after it began streaming signals of the network affiliate stations in Los Angeles. Using the same approach they had tried, unsuccessfully, in the NYC litigation against Aereo, the networks sought a preliminary injunction, asking Judge Wu to stop Aereokiller from retransmitting the networks’ over-the-air broadcasts until the litigation had been concluded. 

As we learned in the Aereo preliminary injunction post, the networks could win their motion for preliminary injunction only if they could show:

• A likelihood of succeeding on the merits of the case itself;
• That they would suffer irreparable harm in the absence of preliminary relief;
• That the balance of equities tips in their favor;
• That an injunction is in the public interest.

In both the Aereo and Aereokiller cases, the broadcasters were able to satisfy three of those four criteria. But you need all four, and in the Aereo case in New York, the judge was not convinced that the broadcasters were likely to prevail on their central infringement claim – because the Second Circuit’s Cablevision decision posed an insurmountable obstacle to that claim. So Aereo was allowed to continue to operate.

Aereokiller was not so lucky. Judge Wu in Los Angeles concluded that the broadcasters are likely to prevail. 

First, and foremost, he reminded everyone of basic geography: California is in the Ninth Circuit, not the Second Circuit. Therefore, he is not bound by either the Aereo decision or the Second Circuit’s Cablevision decision. 

More importantly, Judge Wu surmised that the Ninth Circuit – whose decisions are binding on Wu – would have come out differently in the Cablevision case. His disagreement with the Second Circuit is based on an alternate interpretation of the Copyright Act. In his densely reasoned opinion, Judge Wu parsed the meaning of terms such as “transmission”, “copy”, “work”, “performance” and “performance of a performance”. He concluded that, in Cablevision, the Second Circuit placed too much importance on whether the end user (i.e., the Aereo subscriber/viewer) was ultimately receiving a public performance of a transmission; the key issue should have been whether the end user is receiving a public performance of a copyrighted work “irrespective of which copy of the work the transmission is made from”. 

As the Judge explained:

Very few people gather around their oscilloscopes to admire the sinusoidal waves of a television broadcast transmission. People are interested in watching the performance of the work. And it is the public performance of the copyrighted work with which the Copyright Act, by its express language, is concerned. Thus, Cablevision’s focus on the uniqueness of the individual copy from which a transmission is made is not commanded by the statute.

Judge Wu also cited a law review article by the esteemed (by some) Judge Richard Posner (from the U.S. Court of Appeals for the Seventh Circuit), who proposed this analysis of the considerations relevant to the assessment of copyright infringement claims:

A rational resolution of the issue requires discerning the purpose of giving the owner of a copyrighted work the exclusive right to perform it. The purpose is to prevent the form of free riding that consists of waiting for someone to spend money creating a valuable expressive work and then preventing him from recouping his investment by copying the work and selling copies at a price below the price the creator of the work would have to charge to break even.

As Wu sees it, in Judge Posner’s terminology, Alki David and (presumably) Barry Diller are in effect free riders. 

All of which puts the Aereo decision (from a District Judge in the Second Circuit) and the Aereokiller decision (from a District Judge in the Ninth Circuit) on course for a collision in the Supreme Court.

If both the Second Circuit and the Ninth Circuit affirm their respective lower courts’ views as to what constitutes a public performance, the result will be a classic “circuit split” that could be resolved only by the Supreme Court (unless Congress were to intercede with legislation addressing the problem). In my mind, it’s dead-on certain that the Supreme Court would agree to resolve the split in Circuit law, should such a split develop. The Supremes would have to resolve that split because avoiding it would result in a nationwide service being treated differently according to region, with similar parties treated in vastly distinct manners under the law.

In that case the Supremes would likely consider not only how the statutory language itself must be read, but also what Congress intended and how much weight that perceived intention should be accorded. That, in turn could, lead to Congressional revision of the definition of “public performance”, should Congress disagree with the Court’s decision. In which case, there is still the possibility that David, Diller and innovators everywhere win in the end (and for that, from a strictly legal-nerd perspective, I love them . . . because this will be fascinating to watch). 

But that’s all a bit speculative – we probably won’t get to that point for a year or two, if ever.

In the meantime, the situation will have to remain geographically muddled. In the Second Circuit, Aereo may still operate its service (although the legal momentum Aereo had been enjoying may be diminished some thanks to Judge Wu’s contrary analysis). But in the Ninth Circuit, Aereokiller – although offering a service extremely similar to Aereo’s – may not

retransmit[ ], stream[ ], or otherwise public perform[ ] or display[ ] within the geographic boundaries of the [Ninth Circuit], directly or indirectly, over the Internet (through websites such as filmonx.com or filmon.com), via web applications (available through platforms such as the Windows App Store, Apple’s App Store, the Amazon Appstore, Facebook or Google Play), via portable devices (through applications on devices such as iPhones, iPads, Android devices, smart phones, or tablets), or by any means of any device or process, the Copyrighted Programming.

For purposes of the injunction, “Copyrighted Programming” refers to all broadcast TV programming in which any of the plaintiff broadcasters holds an exclusive right under the Copyright Act. The plaintiffs include NBCUniversal, Telemundo, ABC/Disney, CBS, Open 4 Business Productions and Big Ticket Television, Inc.

The Second Circuit encompasses New York, Connecticut and Vermont. The Ninth Circuit covers Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, the Northern Mariana Islands, Oregon and Washington – and Guam and the Northern Mariana Islands, too! 

That leaves a huge chunk of America’s heartland in which Aereo and/or Aereokiller may or may not be deemed legal. For now, the Swami will remain silent on where he sees this going. . . .

This result is not unexpected. ivi TV was trying to stretch some statutory language beyond its seemingly natural meaning. There’s no harm in trying such a gambit, especially when technological change is occurring so fast that legislation can’t keep up. If existing laws don’t specifically address the latest technologies, it makes sense for the proponents of those technologies to do what they can to try to squeeze their ideas into the existing regulatory pigeonholes.

Such efforts, however, are not guaranteed to succeed. That’s especially true when, as here, the innovative approach would threaten the interests of others (in this case, broadcasters and other copyright-holding video content providers).

According to one published report, an ivi TV spokesperson has said that this is “not the final chapter” to the ivi TV story. It’s not clear what ivi TV might have in mind, but one might imagine that it might be thinking about re-casting its legal theory along the lines of Aereo.

Readers will recall the Aereo system, which allows subscribers online access to over-the-air programming through dime-sized antennas, each of which is allocated to a single subscriber. Rather than stretch the definition of “cable system”, as ivi TV unsuccessfully tried to do, Aereo pitched its system as nothing more than a modern-day equivalent of a VCR. Back in the 1980s, the Supreme Court had held (in the famous Betamax case), that private use of a VCR does not involve copyright infringement. And in 2008 the Second Circuit itself had extended that notion to include a “remote storage” DVR system provided by Cablevision to its customers. 

So far Aereo’s approach has survived the same type of broadside legal assault mounted by the networks against ivi TV. That probably frosts ivi TV’s cookies, particularly because Aereo has succeeded in the same jurisdiction – the federal district court in the Southern District of New York – where ivi TV has struck out. And objective observers might raise an eyebrow at the notion that broadcast programming might legally be made available online to subscribers by Aereo but not by ivi TV. After all, if the end result is the same – i.e., Joe and Loretta Six-Pack can view broadcast programming on their desktops or mobile devices – why should the law differentiate between the ivi TVs and the Aereos of the world?

ivi TV may try to make such an argument to the Second Circuit, or possibly even the Supreme Court. And maybe one of the two, or some other court (such as the Ninth Circuit, which may be the site of the next dust-up between BarryDriller.com and the broadcast networks), might eventually agree, although we wouldn’t recommend holding your breath until that day comes.

Whether the law will eventually adopt a coherent approach to the online delivery of video programming – an approach that might accommodate the ivi TVs and the Aereos of the world, as well as others yet to be identified – is uncertain at this point. But that doesn’t mean that the players already on the field can’t adjust their playbook to the law as it currently stands. As we recently reported, FilmOn.com – an online quasi-cable service relying on a very ivi TV-like approach to the law – has reportedly agreed to a permanent injunction prohibiting it from retransmitting certain broadcast content. But at the same time, the FilmOn.com folks have launched BarryDriller.com, an Aereo look-alike. While ivi TV might continue to fight for its interpretation of Section 111 in the courts, it would seem that switching to the Aereo model might be a better strategy, at least in the short run.

The real question, though, is where the long run will take all of this. As my colleague Kevin Goldberg has cogently (and persuasively – to me, at least) argued, what we really need here is a fundamental change, a change that brings the various copyright and cable-regulation laws into line with the viewing habits of 21st Century television watchers. Kevin has noted that there have been inklings that such changes may be in the early stages at both the FCC and the Copyright Office. In view of the speed (think glacial, but with a flat tire) with which the government has thus far reacted to such things, it’s probably unrealistic to expect near-term change. But we can at least hope that the process has started.

Though ivi TV may be on its last legs, it still technically exists. ivi TV initially sought (in federal court in the State of Washington) a declaratory judgment that its service does not violate the Copyright Act. It lost. Meanwhile, ivi TV was sued by the major broadcast networks, who won. They sought – and received – a preliminary injunction against ivi TV from the U.S. District Court for the Southern District of New York. Not one to be stopped by a little injunction, ivi TV has appealed that decision to the U.S. Court of Appeals for the Second Circuit. (Oral argument was held in late May. A decision could come down any time now.)

FilmOn.com is very similar to ivi TV. Started in 2010, it’s an online system claiming to fall within the Copyright Act’s definition of “cable system”. Like ivi TV, FilmOn.com was almost immediately sued by the major broadcast networks and, like ivi TV, it was quickly on the back foot. Within a couple of months of its launch in late 2010, Filmon.com was hit with a Temporary Restraining Order prohibiting it from infringing “by any means, directly or indirectly” any copyrighted material. That slowed the service down, but did not stop it immediately. 

And now – almost two years later – FilmOn.com has reportedly agreed to a permanent injunction that will apparently require it to stop streaming the signals of the four major networks – at least until FilmOn boards BarryDriller.com (more on that in a moment). Oh, yeah, according to trade press reports, FilmOn.com will also be ponying up about $1.6 million to settle the case.

But that’s not the end of the story. After all, when you’re funded by billionaire Alki David, you’re not going to go away simply because a federal court tells you to. (Possibly instructive anecdote: David is the gentleman who reportedly offered $1 million to the first person who would streak in front of President Obama with “Battlecam.com” – another David enterprise – written across the streaker’s chest.) So, like a phoenix rising from the ashes, “BarryDriller.com” has emerged. BarryDriller.com is David’s new project (which is reportedly being funded by a related company called “AereoKiller, LLC”). BarryDriller.com is said to be “Aereo-like”. Though there are differences (BarryDriller.com will charge subscribers about half of what Aereo charges and claims that it will pay broadcasters for their content), BarryDriller.com is certainly like Aereo in one sense: it’s been in business for just a few days and has already been sued by Fox.  

If nothing else, the BarryDriller.com suit is interesting for one reason: its locale. The suit was filed in the U.S. District Court for the Central District of California (because BarryDriller.com was retransmitting KTTV, the Fox affiliate out of Los Angeles). Different city = different court = different governing precedent. While Judge Allison Nathan of the U.S. District Court for the Southern District of New York was bound by the Second Circuit’s Cablevision DVR decision in ruling for Aereo last month, the Cablevision decision doesn’t have the same weight in the wild, wild west. I’ve said from the start that the endpoint for the Aereo case would be the United States Supreme Court if at least one federal court outside the Second Circuit were to reject the rationale of the Cablevision decision. Such a ruling would set up a “circuit split” that might induce the Supremes to wade into the thicket and sort things out. If nothing else, BarryDriller.com may have accelerated that process by giving the networks the opportunity to sue David and company in California, where the Ninth Circuit is the top federal dog.

When one party (i.e., the plaintiff) sues another party (i.e., the defendant), the result is an evidentiary trial (assuming, of course, that the parties don’t settle beforehand, or one of the two parties isn’t able to convince the judge that the issues are so clear that no trial is necessary). Preparing for and then actually trying the case takes months, maybe even years. Because of that, plaintiffs who are attacking defendants’ ongoing conduct often ask the court to put a halt to – or “enjoin” – that conduct pending conclusion of the trial.

When a plaintiff asks for an injunction, the court is called upon to consider a number of factors. Among those factors is the likelihood that the plaintiffs’ substantive charges will ultimately stick at trial. After all, if the plaintiffs’ case on the merits is weak, why should the defendants be ordered to stop what they’re doing? But on the other hand, if the plaintiffs can demonstrate that they’ve got a seriously kick-butt case, why should the defendants be permitted to continue to engage in their alleged misconduct?

So when an injunction is requested, long before the trial itself occurs, the court conducts a hearing (like a mini-trial) to determine whether or not to grant the requested injunction. Judge Nathan’s decision resolves that preliminary question in the Aereo case.

And while a decision on a stay request does not necessarily determine resolve the issues to be addressed in the main trial, in this instance the denial of the stay may indeed resolve the case itself.

The gist of Judge Nathan’s decision is that the broadcasters are unlikely to prevail on their infringement claims. And that’s because the Second Circuit (whose rulings are binding on the U.S. District Courts in New York, including Judge Nathan) has already ruled, in 2008, that use of technology akin to Aereo’s does not constitute copyright infringement. The 2008 ruling – in Cartoon Network LLC, LLLP v. CSC Holdings, Inc. – involved Cablevision’s RS-DVR system. The Second Circuit figured that that system was functionally equivalent to the type of private video cassette recorder that the Supreme Court had blessed way back in 1984, in the Betamax case. 

In the view of the Second Circuit, when a system for delivering video programming involves a “single subscriber using a unique copy produced by that subscriber”, that system is not providing transmissions “to the public”, but rather to that single subscriber. Since transmissions “to the public” are an essential element of “retransmission” for copyright infringement purposes, a “single subscriber” system does not infringe.

It’s pretty clear that the folks who devised the Aereo system used the blue print provided by the Second Circuit as a guide to the design of their system. As presented to Judge Nathan through a number of technical witnesses, the Aereo system looked just like its earlier infringement-free counterparts – technologically distinct, of course, but functionally the same as the RS-DVR and the Betamax, as far as copyright law is concerned. In fact, the judge seemed to conclude that Aereo’s system is even more legal than its precursors. That’s because, as she saw it, Aereo invariably provides only a single data stream to a single user throughout its process, while the RS-DVR system started with multiple data streams from which it then created individual user streams. If the latter didn’t constitute an infringing use, the former certainly didn’t.

Judge Nathan was not unsympathetic to the broadcasters. She agreed that the operation of Aereo could cause the broadcasters irreparable harm, and she seemed to view the relative harms that would be suffered by the broadcasters, on the one hand, and Aereo, on the other, as reasonably equivalent. And, surprisingly, she even said that an injunction “would not disserve the public interest” – which, when you unwind the double negative, seems to say that the public interest would be served by an injunction.

It's worth noting too that Judge Nathan clearly did not intend to open the door to any number of other technical innovations in the future. Broadcasters, who might fear her ruling as a massive expansion of the concept of "public performance", will presumably read her opinion with suspicion in this regard.  But in assessing the public interest considerations, she specifically rejected the exceedingly broad claim advanced by Aereo and Electronic Frontier Foundation (an amicus on Aereo's side), i.e., that free access to and reception of broadcast television by any medium is necessarily in the public interest. 

That claim echoes a theme espoused by new media innovators everywhere. They assert that copyright owners have some obligation to share their works with the public because that’s just the way the electronically interconnected world operates now.  (The corollary: anyone who tries to stifle innovation is a dinosaur (or worse).)  For the record, we're on board with Judge Nathan when she observes that, taken to its logical extension, that notion would lead to the conclusion that the public interest favors no copyright restrictions at all, since "unrestrained piracy" of content would also increase public access to that content.

But none of those points arguably favorable to broadcasters could override the fact that Judge Nathan did not believe that the broadcasters are likely to prevail on the merits.

That doesn't necessarily mean that the broadcasters can’t prevail on the merits. The trial process is a long one, often with lots of unexpected twists and turns. One possible scenario: to support their injunction request, the broadcasters relied on a report from an expert witness who did not personally testify at the hearing (the broadcasters offered his written report instead). In his view, the Aereo system is not the functional equivalent of the RS-DVR approach. But Aereo offered live testimony from its experts to counter that view, and the Judge found Aereo’s witnesses to be “highly credible and persuasive”. It’s at least possible that, if the broadcasters were to put their experts on the witness stand at trial, they might be able to undermine the persuasive showing advanced by Aereo during the injunction hearing. That’s particularly so in view of the fact that the Judge has now explained why she believes that Aereo’s system (at least as she understands it) doesn’t infringe. If the broadcasters’ experts could convince her that her understanding is incorrect in any respect, they might be able to turn things around.

Another possible line of attack to explore: the front end of the Aereo system, in which Aereo first acquires and records the over-the-air programming for later transmission to Aereo’s subscribers. Judge Nathan’s opinion focuses on the back end of the Aereo system, i..e., the process by which the subscriber accesses and retrieves the programming. Since it doesn’t appear to have been fully explored in the injunction hearing, the front end of the Aereo system -- and the transition from the front end to the back end -- may be susceptible to effective challenge at trial.

In her opinion Judge Nathan went to some lengths to emphasize that her conclusions as to the broadcaster’s likelihood of success were intended to be narrow. Nevertheless, her decision doubtless reassures Aereo that its approach is solid: keep yourself well within the wake of the RS-DVR and Betamax precedent and you should be able to avoid copyright problems.

According to the opinion, the broadcasters have signaled that they’re probably going to appeal this interlocutory decision. That appeal would go to the Second Circuit – so if Judge Nathan is reading the Circuit’s Cartoon Network opinion incorrectly, the Circuit can set everybody straight sooner rather than later. But in the meantime, it looks like Aereo will remain up and running for the foreseeable future.

When the Supremes decline to review a case (which they do in the vast majority of cases that get filed with the high court), the action is normally reflected in a simple nine-word order – “The petition for a writ of certiorari is denied.” That means that at least six of the justices saw no reason to hear the appeal. The final order in the Jackson case followed that course.

But in the Jackson case, Chief Justice Roberts bothered to write a two-page concurring opinion questioning whether the Third Circuit had really gotten it right. The Third Circuit’s decision was based on the notion that the half-second exposure of Ms. Jackson’s right breast was essentially the same as a “fleeting expletive”. As to that analogy, Roberts says “I am not so sure.” As he sees it, images are different from words. To hammer that point home, he quotes the prosaic proverb, “a picture is worth a thousand words”.

But, given the Court’s decision in FCC v. Fox, Roberts acknowledges that the distinction is in any event immaterial: “[i]t is now clear that the brevity of an indecent broadcast – be it word or image – cannot immun­ize it from FCC censure.”

This underscores the narrowness of the Fox decision and the continuing vitality of indecency regulation, at least in the Chief Justice’s mind. While the bottom line in Fox was that Fox and ABC got off the hook, that happy result was based on the technicality that the broadcasts in question had occurred before the Commission had announced, in 2004, that fleeting expletives (and, by extension, fleeting images) were taboo. The Court’s opinion left wide open the question of whether the FCC could, consistently with the First Amendment, penalize such broadcasts occurring after the 2004 announcement. It also left open the question of whether the FCC could penalize other instances of non-fleeting language (or images), regardless of whether they were aired before or after the 2004 announcement.

Roberts’s separate opinion clearly suggests that he, for one, believes that the FCC’s indecency policies can, should and do live on post-Fox. 

On the other hand, adding still more flair to the Court’s denial of review in the Jackson case, Justice Ginsburg also weighs in with a concurring opinion. It consists of one sentence, which we reproduce here in toto:

The Court’s remand in FCC v. Fox Television Stations, Inc., 567 U. S. ___ (2012), affords the Commission an opportunity to reconsider its indecency policy in light of technological advances and the Commission’s uncertain course since this Court’s ruling in FCC v. Pacifica Founda­tion, 438 U. S. 726 (1978).

That, of course, echoes her concurring opinion in Fox in which she announced her strong belief that the Court’s first and only (thus far) endorsement of indecency regulation (in Pacifica) was “wrong”. (Memo to Justice Ginsburg: Could you try not to sugarcoat it next time?)

So there you have it: a court that is still split on whether the government can constitutionally regulate broadcast indecency. We’ve had to live in the shadow of that uncertainty since the 1978 Pacifica decision. It looks like we’ll be living with for some time to come.

Several justices have historically demonstrated uneasiness with the notion of removing regulations they perceive as necessary (or at least useful) in maintaining some sense of morality or decorum on the public airwaves. No big surprise there – I have repeatedly noted in earlier posts that the Court has been cautious about language and decorum. (For instance, they frown on use of the actual words – fuck, shit, etc. – in the courtroom or in their opinions. They opt instead for euphemisms like “f-word” and “s-word”.) In particular, it was always highly unlikely that Justices Roberts, Scalia and Alito were going to sign on to a decision opening the airwaves to what they felt would be a cacophony of indecency.  

Furthermore, this Court has always been somewhat cautious when it comes to First Amendment cases (as I have discussed in previous posts). I have detected little sentiment on the Roberts Court for actions that completely overturn longstanding laws based on facial First Amendment challenges. And, truth be told, the Court has historically not shown any such sentiment. In fact, the longstanding principle of “constitutional avoidance” holds that the Court will not take on a constitutional issue when it can dispose of a case via other means.

So it’s not surprising that the Court as a whole may have been reluctant to push the button on the First Amendment thermonuclear option when a narrower alternative was available. 

Blogmeister: But the “narrower” alternative here was still a constitutional provision – the “due process” clause of the Fifth Amendment. How does that fit into any “constitutional avoidance” notion?

Swami: Sure, it’s still the constitution, but look at the differences. Assume that everybody agrees that the FCC should not have penalized the Fox and ABC broadcasts at issue here. To get to that result through the First Amendment, the Court would have had to hold that the FCC’s indecency policies – or at least some significant subset of them – are barred by the First Amendment. That would open up a whole host of follow-up questions that would almost invariably take the Court back to Pacifica. By contrast, the Fifth Amendment approach the Court used allowed them to find that, whether or not the indecency policy is consistent with the First Amendment, the two broadcasters (Fox and ABC) didn’t get the due process notice to which they were entitled under the Fifth Amendment. Net result: the penalties meted out to those two broadcasters are tossed without anybody having to come to grips with the First Amendment arguments.

This is, of course, very frustrating for those of us who have been waiting patiently for some conclusive ruling by the Supreme Court as to the constitutionality of the FCC’s indecency policy. When it agreed to hear the Fox case this time around, the Court specified that the only question to be considered was

[w]hether the Federal Communications Commission’s current indecency-enforcement regime violates the First or Fifth Amendment to the United States Constitution.

Many of us read that to refer to the overall indecency regime as a whole, not merely the particular application of that regime to two particular parties. We obviously guessed wrong.

(This is a good time to point out another possible reason that the Court decided this unanimously and narrowly. It’s a hypothesis advanced by UCLA professor Eugene Volokh. Volokh theorizes that the recusal of Justice Sotomayor left the Court in serious danger of a 4-4 split on the merits if it ruled on the overriding First Amendment issue. That would have been the worst possible result, leaving the Second Circuit decision in place but providing no Supreme Court precedent. The narrow decision was therefore a tactical means of getting to a result favored by all justices without forcing the Court through a divisive and ultimately deadlocked First Amendment analysis.)

Blogmeister: But that doesn’t mean that the First Amendment problems with the FCC’s indecency policy have gone away, does it?

Swami: Absolutely not. That issue isn’t going away. The Court’s unwillingness in the Fox case to address that issue squarely, for once and for all, means we’re almost certain to be back here several years from now (maybe just in time for another election day). 

Blogmeister: OK, so here we are, with a very narrow, largely analysis-free Supreme Court decision based on Fifth, not First, Amendment grounds – a decision that appears to apply only to these three broadcasts.   What comes next?

Swami: That’s unclear.  According to the Supremes, “[t]he judgments of the United States Court of Appeals for the Second Circuit are vacated, and the cases are remanded for further proceedings consistent with the principles set forth in this opinion.” So the Second Circuit’s broad, sweeping (and, to many us, welcome) opinion holding the indecency policy to be inconsistent with the First Amendment has now been tossed by the Supremes. As a result, the FCC’s indecency regime, as a whole, remains in place.

I’m guessing the Court is also telling the Second Circuit that it should simply and quickly issue an order reversing the FCC’s actions for the reasons stated by the Supremes. Since the Second Circuit obviously feels strongly about this case – you can tell that from its first two opinions – I suppose it’s possible that the Circuit might use the opportunity of a remand to signal how broadly it plans to read the Supreme Court’s decision and whether the Second Circuit will continue to be the “go-to” circuit for indecency cases. And you can take the Swami’s word for it – there will be more indecency cases. As the Supreme Court expressly observed, its decision leaves the courts “free to review the current policy or any modified policy in light of its content and application”. 

The more intriguing question, though, is how the FCC will react to this decision. It obviously just dodged a bullet. Does it tweak its indecency policy, does it massively overhaul that policy, does it scrap the policy entirely, or does it just leave it the way it’s been for the last six-seven years? In light of the Commission's traditional behavior, I suspect it’ll be the last option – the FCC as Decency Police will continue to pound the beat – but you never know. After all, we now have Justices Thomas and Ginsburg on the record saying that they seriously question whether the indecency policy could withstand First Amendment scrutiny. At some point the FCC may be able to take a hint.

Blogmeister: And beyond that, what does the Supreme Court’s decision mean for indecency cases pending at the FCC?

Swami: That, too, remains to be seen. In a perfect world, the Commission would go through all the million or more still-pending indecency complaints and divide them into two groups: (a) complaints involving “fleeting expletives” and (b) all others. Then it would take all the complaints in Group (a) and subdivide them into two categories: (i) those that occurred prior to the 2004 Golden Globes decision that announced an end to the Commission’s previous “fleeting expletive” policy (i.e., the policy that let such instances slide without penalty), and (ii) those that occurred after. I get the need to draw that latter line from Justice Kennedy’s majority opinion. He makes a point of saying that “[the] regulatory history, however, makes it apparent that the Commission policy in place at the time of the broadcasts gave no notice to Fox or ABC that a fleeting expletive or a brief shot of nudity could be actionably indecent”  (emphasis added). 

So once all complaints involving fleeting expletives or nudity that occurred before the 2004 Golden Globes decision are identified, the Commission would promptly dismiss them, since they would all be essentially identical to the Fox/NYPD Blue situations. All other complaints would be left for routine processing.

But with the sheer volume of pending complaints, it’s hard to imagine that the Commission is in a position even to begin such a triage process.

And let’s not forget the fact that, even if the FCC goes ahead with indecency complaints which may survive the Supreme Court’s decision, and even if it ends up issuing fines in those cases, the government will be hard-pressed to collect any fines in cases older than five years. That’s because of 28 U.S.C. §2462, a federal law that requires that lawsuits by the Feds to enforce a civil fine, penalty or forfeiture be initiated within five years after the underlying claims accrue. The Communications Act provides that, if a licensee hit with a fine simply declines to pay, the FCC’s only recourse is to sue the licensee for payment – and until that suit is finally resolved in favor of the FCC, the Commission can’t use the licensee’s alleged violence in any way that might prejudice the licensee. So any case that would be subject to the five-year statute of limitations in 28 U.S.C. §2462 could (and, in an ideal world, should) all be summarily tossed regardless of the Fox decision.

Blogmeister: When you look into your crystal ball, what do you see happening on the indecency front?

Swami: The Court told the FCC expressly that the Commission “remains free to modify its current indecency policy in light of its determination of the public interest and applicable legal requirements.” And it told the courts that they are “free to review the current policy or any modified policy in light of its content and application”. 

So we could see the FCC revise its policy. Or we could see the FCC stick to its guns, applying the current policy against another broadcaster in one of those nonfleeting expletive or post-Golden Globe cases. If that broadcaster then brings challenges the constitutionality of the entire scheme, that challenge could work its way up the courts, finally returning to the Supreme Court, maybe just as we round into yet another Presidential election year.

Or not. Concentrate and ask again later.

In fact, it assiduously avoided even coming close to Pacifica. Pacifica, of course, upheld – against a strong First Amendment attack – the FCC’s general authority to regulate broadcast indecency. This time around, the Court is relying on the Fifth Amendment’s due process clause (which, for our purposes here, assures adequate “notice”). Hence, Pacifica lives on.

But for how long? That’s where Ginsburg’s terse concurrence is particularly intriguing. It reads, in its entirety, as follows:

In my view, the Court’s decision in FCC v. Pacifica Foundation, 438 U. S. 726 (1978), was wrong when it issued. Time, technological advances, and the Commis­sion’s untenable rulings in the cases now before the Court show why Pacifica bears reconsideration. Cf. FCC v. Fox Television Stations, Inc., 556 U. S. 502, 532–535 (2009) (THOMAS, J., concurring).

Now bear in mind that, the last time the Fox case rolled through the Supremes (back in 2009), Justice Thomas said pretty much the same thing (as Ginsburg's citation to Thomas’s 2009 Fox concurrence acknowledges). That makes two justices, on polar opposite ends of the ideological spectrum, ready to pound a stake into the heart of Pacifica. 

Check back here later for a more complete analysis by Swami Kevin Goldberg.

Not really, at least according to a cadre of broadcasters who have claimed, in two separate suits, that Aereo’s system infringes on their copyrights by illegally reproducing and publicly performing copyrighted programs.  (Read the complaints here and here.) The broadcasters also argue that Aereo’s operation would violate New York unfair competition law. Their theory is that Aereo is commercially exploiting the programming and the broadcast infrastructure without authorization in a way that “undermines [the broadcasters’] substantial creative and financial investment in their audiovisual works” as well as the broadcasters’ "efforts and labor". (If we may paraphrase that latter claim, it seems to us to be something like: “Look, there’s a system in place that allows broadcasters to be paid by cable and satellite systems in exchange for carriage of their signals. It’s existed for many, many years. You, Aereo, are unilaterally threatening that system”.)

As the broadcasters see things, Aereo is engaging -- or, more accurately, will engage in , since Aereo's system isn't slated to launch until March 14 -- in the “retransmission” of OTA broadcast signals. Under the copyright laws, of course, the “retransmitter” ordinarily needs to get permission from the copyright owner of the “retransmitted” material before any “retransmission” can lawfully occur. Aereo doesn’t have such permission, so it’s infringing – hence the lawsuits.

Hold on there, says Aereo. Aereo doesn’t “retransmit” the signal in a way that violates the law. Rather, they’re simply a company that rents antennas to subscribers. Those antennas pick up a broadcast signal within the local area; the fact that the antenna doesn’t happen to be in the subscriber’s home isn’t legally significant. I think everyone would agree that, at least up to this point in the analysis, what Aereo has done is completely legal.

But Aereo’s service doesn’t just deliver the OTA signals from an antenna to a TV set. It makes them available on the Internet. Does that constitute a direct retransmission of content that was lawfully received at each individual antenna? Or does it just make it easier for consumers to do what they are otherwise entitled to do anyway?

That, of course, is the $20 million dollar question for Aereo ($20 million being the approximate level of financing it’s rounded up). 

The problem is that there are two lines of precedent potentially at work here – and they lead to different results.

On the one hand, you have the Betamax/Cablevision model. Old-timers will recall the 1984 Betamax case, in which the Supreme Court concluded that use of a VCR by individual consumers for the purpose of “time-shifting” the viewing of programming did not constitute copyright infringement. (All you kids, “VCR” stands for “videocassette recorder” – ask your parents.)

That theory was expanded somewhat in 2008, when the U.S. Court of Appeals for the Second Circuit concluded that Cablevision’s “remote storage” DVR system similarly did not infringe on copyrights. Under that system, Cablevision subscribers no longer had a separate VCR or DVR recording unit in their homes; instead, Cablevision took care of the recording – at the subscriber’s request – within its own system. The subscriber could then access the recorded programming by using its remote control device, just as if the subscriber was using a set-top recording unit. The Second Circuit held that this did not constitute infringing retransmission. The court focused in particular on the fact that each playback transmission went to a “single subscriber using a unique copy produced by that subscriber” – and, therefore, such transmissions were not made “to the public”, an essential element of “retransmission”.

On the other hand, you have the ivi TV and FilmOn.com cases. Those involved companies claiming that they were entitled to retransmit OTA broadcast signals to subscribers over the Internet. As our readers should recall, that claim ran into a brick wall – actually, a couple of brick walls. At least two courts weren’t willing to buy into the notion that an on-line operation should be entitled to compulsory carriage rights under the copyright laws.

Aereo is probably planning to rely on the reasoning in the Cablevision case: Aereo is, after all, providing its service to one subscriber at a time through one antenna at a time. As a result, so the argument goes, any transmission of programming that occurs is not “to the public”, but rather to the individual subscriber. No copyright infringement there, right?

But what of the fact that each retransmission occurs over the Internet, providing access to the programming not just in the comfort of the subscriber’s living room, but anywhere? The Cablevision case did not involve that Internet component; the ivi TV and FilmOn.com cases did. Does that make a difference? Should it?

Which brings us back to the $20 million question. I really have no clue how this is likely to end up, and I will be as interested as anyone to see how the courts will react. Interestingly, the broadcasters have sued Aereo in the U.S. District Court for the Southern District of New York, the court which dealt Filmon.com and ivi TV major setbacks. Bad news for Aereo? Maybe, maybe not: decisions from that court get appealed to the Second Circuit, source of the Cablevision decision. 

Should we read something, then, into the fact that Aereo is launching in the New York market first?  Perhaps, because if Aereo can convince either the District Court or, failing that, the Second Circuit court that it is like Cablevision, it should win. But what about the planned launches elsewhere? I can see further lawsuits, one in each city until a “circuit split” is created on this issue. From there, it could be on to the Supreme Court, source of the Betamax case. There may be some method to Aereo’s madness. This could get interesting.  

But, even if the Supreme Court doesn’t resolve the issue, I know one thing and I’m going to sound like a broken record saying it (Problem understanding that metaphor? Ask your parents, again): there needs to be a significant overhaul of all Copyright Laws, or at least some form of compulsory license to allow on-line transmission of broadcast programming so that the many innovators who actually want to save broadcast television programming can do just that.

Swami: The government was claiming that, in return for the supposedly free spectrum, broadcasters should be happy to cough up some of their constitutional rights. I have a real hard time with that notion, particularly because even the Pacifica court didn’t seem to go down that road. But maybe the government is looking to move away from the “protect the kids” justification in light of the Supremes’ Brown decision last term. (In that case, the Court threw out a California statute restricting the sale of violent video games to minors. The Court held that the state hadn’t demonstrated that such games cause harm to minors. Justice Scalia, writing for the majority, observed that “disgust is not a valid basis for restricting expression”.)

Blogmeister: Another thing. How about the Fox lawyer’s willingness to throw the radio industry under the bus? Noting that Pacifica involved a radio broadcast, Justice Alito asked whether there is a basis to distinguish between radio and TV for purposes of indecency regulation. Counsel for Fox seemed happy to say that radio is different and, thus, on its own to argue that the FCC’s indecency policies can’t be applied to radio.

Swami: That was pretty striking. But for my money, the highlight of the argument came when ABC’s counsel pointed out to the Justices that the Supreme’s courtroom itself features images of bare breasts and buttocks. As counsel proceeded with his argument, he apparently noticed that Scalia was looking around the court to see if he could see those images. Counsel happily pointed them out to the Justice, noting that counsel hadn’t focused on them before. “Me neither”, responded Scalia. And, as a service to our readers, here’s one of those images (depicting Philosophy, from the north wall frieze):

Blogmeister: OK, enough of the color commentary. Let’s get down to the real nitty-gritty. How do you figure the Court’s going to come out here? Are you sticking with your prediction from last June?

Swami: I still see Justices Kagan and Ginsburg voting in favor of the broadcasters. Not a big surprise – at least to me – since I had them both in this camp when I made my initial predictions last year. Both Kagan and Ginsburg expressed serious concern about the “appearance of arbitrariness about how the FCC is defining indecency in concrete situations”, as Ginsburg put it. I thought it was noteworthy, too, that Justice Ginsburg – an opera buff – pointedly asked whether televising a nude scene from The Makropulos Affair (a Czech opera – who knew? – apparently misidentified in the official transcript as “Metropolis”, at least according to some commentators) would run afoul of the FCC. 

Blogmeister: I just moved The Makropulos Affair way up in my Netflix queue.

Swami: Not to be confused with Fritz Lang’s great “Metropolis”, the classic 1927 sci-fi film. 

But enough about movies, operas, Kagan and Ginsburg. On to the other side of the Court, where it seems equally clear that Chief Justice Roberts and Justice Scalia are two solid votes for the FCC. Both surprised me a little, since they’re key switches from my predictions last summer. I figured that Scalia would set aside his morality-tinged aversion toward indecent speech in favor of his longstanding interest in protecting even controversial speech. Also (as I pointed out last year), his opinion in the Brown case sure suggested that he doesn’t buy into the “we must protect the kids” rationale that underpinned the 1978 Pacifica decision. And for Roberts, I thought he would stick with the position he staked out in Snyder v.Phelps and United States v. Stevens. I probably shouldn't have trusted my gut on either one.

During the argument, both Roberts and Scalia clearly indicated that they believe that broadcasters have a higher responsibility to society, and that the government is entitled to insist on what Scalia termed a “certain modicum of decency”. It looked like they were buying into the government’s new contract theory – i.e., since the government is supposedly giving broadcasters their lucrative spectrum for free, the government can exact something in return. Seeming to step out of his role as judge and into the role of regulator, Roberts said that “[a]ll we are asking for, what the government is asking for, is a few channels where you are not going to hear the S word, the F word. They are not going to see nudity.”   Shoot, simply his use of “S word” and “F word” alone shows you where he stands. Ditto for Scalia, who used similar terms to refer to “shit” and “fuck”.

Blogmeister:  Here’s an interesting factoid: the only two times the Supreme Court has considered whether the FCC can penalize the broadcast of certain words, none of those words has been spoken during the oral arguments. That’s more than two hours of people arguing about the use of a small handful of particular words, and those words never make an appearance. (Check it out: recordings of the arguments in Pacifica and Fox are available on-line.) 

Maybe I’m missing something, but if nobody even says what the words are – and everybody instead pussy-foots around them – that suggests that the words themselves have some inherent mystique that makes them different from all other words. Different and, therefore, subject to different treatment by the government. But words are just words, collections of letters and sounds, with no force in and of themselves. So a failure even to mention what the words at issue are could be seen as a major concession that they really are different. Roberts’s and Scalia’s references to “the S word” and “the F word” reflect their apparent belief that one should not utter the words even in a dispassionate judicial forum in which those words are the very focus. That’s obviously bad news.

Swami: Agreed. (And if you’ll notice: I don’t share the Justices’ aversion to using the words themselves. Before we move on with my predictions, I should just come out and admit that, if I were on the Supreme Court, I’d vote to overturn the indecency regulations.)

So if I’m right on those four, the count’s at 2-2. Since Justice Sotomayor has recused herself from the case – presumably because she was sitting on the Second Circuit when both Fox and ABC rolled through on their way to the Supremes – it will take only four votes, total, to avoid reversal of the decisions below (both of which favored the broadcasters). Where are the other justices?

As is his custom, Justice Thomas didn’t open his mouth during the argument – he hasn’t asked a question during the last five and a half terms – so there’s nothing new there to analyze. I’m sticking with my earlier prediction: not only will he rule for the broadcasters, but he'll actually go the farthest in doing so. He may even take the position that both Pacifica and Red Lion should be abandoned by the court. 

Blogmeister: For the neophytes among our readers, we should explain that “Red Lion” was the 1969 case in which the Supremes held that the First Amendment rights of broadcasters can be abridged by the FCC because spectrum is scarce. Tossing Red Lion would be a huge development in communications law. When the Fox case passed through the Supreme Court back in 2009, Thomas issued a separate opinion observing the “doctrinal incoherence” of Pacifica and Red Lion and expressing an openness to reconsidering both. The Swami may be onto something here. 

Swami: Right, and that might seem very good for the broadcasters. But what if Thomas can’t get a majority of his colleagues to join him? He could end up just writing another separate opinion, which might not be useful in getting the indecency issue resolved once and for all. (More on that later.)

Anyway, Justice Alito seems pretty solid back the other way. In my view, of all the justices he’s the least friendly toward First Amendment rights. He did little during oral argument to make me believe that he’ll change that in this case. He pointed out that the number of over-the-air viewers is shrinking and asked, “why not let this die a natural death?”

Blogmeister: So whether or not there’s a First Amendment violation, he’d be content to just stand aside and let nature take whatever course it might? That’s some First Amendment sensitivity.

Swami: Yeah, that’s why I see him as a vote for the FCC here, which (if I’m right about everybody else so far) still leaves us at 3-3.  But don’t forget that we’ve also got Justices Breyer and Kennedy to consider. Fortunately, I had both in the pro-Fox camp last summer, and the oral argument didn’t fully move me off that.

Let’s start with Kennedy. He seemed skeptical about the government’s claim that there may be some symbolic value in imposing different indecency standards on broadcast TV as opposed to, say, cable. He also showed the most interest in the availability of the V-Chip, which could mean that he sees that as a non-regulatory answer to any possible concerns about children’s access to indecent programming. But he also expressed concern that overturning the indecency rules would inevitably open the door to the all kinds of vulgar television programming. He’s a question mark here.

Blogmeister: Which makes Justice Breyer crucial. 

Swami: And, unfortunately, Breyer seemed confused at times, particularly when he asked the government’s lawyer to walk him through the procedural posture of the case. He also seemed surprised that the ABC bare buttocks case was there at all, as if the Court should instead have been looking only at the Fox fleeting expletives case.

To me, the key to Breyer is his apparent concern about whether the Court really has to, or should, overrule Pacifica.  He seemed to me uncomfortable about holding Fox liable for the fleeting expletives, but possibly more willing to let the FCC penalize the nudity in NYPD Blue. Importantly, he seemed to feel that both results could be reached using the existing Pacifica standard. 

Blogmeister: That doesn’t surprise me. The Supreme Court traditionally is reluctant to overrule itself. And this may be a good example of why. Pacifica was decided back in 1978. It involved an extreme set of facts – the George Carlin monologue at issue involved 12 minutes of the classic “seven dirty words” repeated over and over. The Court in Pacifica emphasized that its decision there was limited to the facts of the case. In his crucial concurring opinion Justice Powell stressed that that narrow focus would be “conducive to the orderly development of this relatively new and difficult area of law” by the Commission and the courts. 

The problem is that that “orderly development” hasn’t happened.

Instead, over the intervening three-plus decades the Commission has gone back and forth, up and down, this way and that way on indecency. And, most importantly, the “standards” it has invoked over the years have not been reviewed by the courts. (That’s the result of a number of factors, including the Communications Act’s odd provisions concerning judicial review of forfeiture decisions.)

It’s as if, 34 years ago, the Court held that it’s OK for the government to penalize folks driving at 100 miles per hour, but at the same time declined to say whether the government could penalize drivers at slower speeds – leaving that question to be decided in later cases through the “orderly development” of the law. No such later cases get to court. Then, 34 years later, the government tries to fine somebody for driving at 20 mph, and that guy challenges the fine, asking the Court (among other things) to throw out the 34-year-old decision as wrong. In such circumstances, the Court might figure that it could reverse the 20 mph conviction without having to toss out the earlier 100 mph ruling. 

Breyer seemed to be thinking that, maybe, even if Pacifica was and remains good law, the Commission’s Fox and ABC decisions can’t be justified.

Swami: So maybe he’ll write his own separate opinion laying that out. But if he does believe that the Second Circuit reached the correct result, even if for the wrong reasons, the bottom line would be good for broadcasters. Unless the FCC gets five votes to reverse the result below, that result would stand. So if Ginsburg, Kagan, Thomas and Breyer – and possibly Kennedy – all agree that the Second Circuit’s reversal of the FCC was correct, broadcasters should prevail.   

Let’s go on the record: the Swami says that the split among the justices will most likely be 5-3 (affirming the Second Circuit) or 4-4. That’s just a count as to which sides the justices take. Almost certainly we’ll see a split court with multiple opinions and, probably, no single opinion reflecting the views of a majority of justices.

Blogmeister: And while that’s not a bad thing, it’s not optimal. Multiple opinions, including separate concurrences from Thomas (going the furthest, possibly urging that Red Lion be overruled) and/or  Breyer (staying the narrowest, probably looking to preserve Pacifica) would leave everybody in a very frustrating position: we would still not know precisely what programming the Commission can constitutionally prohibit as “indecent”. We’d be back on the quest for “orderly development” of this “difficult area of law”. We can all hope that some such “orderly development” might occur, but based on the last 34 years of that same quest, it’s hard to be optimistic.

Swami: Which kinda puts us right back where we were before all this right? In a place where the broadcasters lack any real certainty as to when they’ll be punished.

To review the recent history of the case, we go back to 2008, when the Third Circuit first reversed the FCC’s decision to whack CBS with a $550,000 fine. Its decision was based on administrative, rather than constitutional, grounds. That is, the court concluded that the FCC’s imposition of a fine for a “fleeting” exposure of a breast was inconsistent with previously-established Commission policies. While the FCC can, of course, change its policies if it wishes, in doing so it must provide notice and an explanation of the change. According to the court, the Commission came up short on the whole notice/explanation thing. Because it found that the case could be resolved on non-constitutional grounds, the court did not take on CBS’s First Amendment arguments.

The FCC asked the Supreme Court to review the Third Circuit’s decision. However, in the meantime the Supremes considered a similar decision from the Second Circuit in the Fox case. In that case, the Supreme Court held that the FCC had adequately explained the apparent abandonment of its “fleeting expletive” policy. As a result, in May, 2009, the Supremes shipped the Fox case back to the Second Circuit for further consideration, and at the same time it shipped the CBS case back to the Third Circuit.

A year later (in July, 2010), the Second Circuit cranked out its decision on remand. There the Second Circuit held that the Commission’s indecency policy violates the First Amendment because it is unconstitutionally vague.   The FCC promptly asked the Supremes to look at that decision, and the Supremes agreed. As noted above, we’re expecting that that case will be argued in early 2012, and a decision should be out by July, 2012.

Meanwhile, the Third Circuit took its own sweet time . . . some 16 months longer than the Second Circuit. And the result of its deliberations, issued November 2, 2011, is nowhere near as dramatic as the constitutional gauntlet thrown down by the Second Circuit.

Instead, the Third Circuit has again concluded that the FCC’s decision in CBS reflected a change in policy that was not adequately announced or explained. Even though the Supreme Court’s 2009 opinion in Fox accorded the Commission considerably greater leeway to change policies than the Commission had previously been thought to enjoy, the Third Circuit remains convinced that the FCC’s CBS decision cannot survive even the more relaxed standard set out in Fox. 

And even the dissenting judge on the Third Circuit panel would reverse the CBS decision and remand it to the FCC. In his view, the Commission did not apply the proper standard of mens rea (a legal concept relating to the accused party's level of improper intent or "guilty mind"), so he would send the case back to the Commission for further consideration.

Where the case goes from here isn’t clear. The Commission could ask the Third Circuit to reconsider its position. (That’s the approach the Commission tried, without success, in the Second Circuit.) The Commission could try to haul CBS back up to the Supremes. Or the Commission could throw in the towel.

Since the Commission hasn’t said die on this yet, it’s probably a pretty good bet that they will continue to fight the fight, at least in the short term. The goal would be to try to keep the case alive in some venue at least until the Supreme Court acts in the Fox case next year. If the Supremes decide that the FCC’s overall indecency policy runs afoul of the First Amendment, then presumably the FCC will drop any further appeal in the CBS case, as there will no longer be any indecency policy to enforce. But if the indecency policy somehow survives Fox’s constitutional challenge, the FCC might want to continue to slug it out with CBS on the non-constitutional issues.

So here we are, nearly eight years after Ms. Jackson’s 9/16 second exposure, with at least several months – and maybe a year or more – of additional litigation ahead. But for the foreseeable future, the broadcast interests (represented by Fox and CBS) appear to be in the driver’s seat. Let’s hope they stay there.

Had the Commission chosen not to take the cases up to the Supremes, the Commission would have been unable to continue those efforts without first radically revising its regulatory approach. (The alternative, of course, would have been simply to walk away from indecency enforcement entirely – an alternative that was, obviously, not the Commission’s first choice.) Such a radical revision would have sucked the Commission back into the regulatory and constitutional quagmire of indecency regulation that has existed for nearly four decades since the Supreme Court’s seminal decision in Pacifica (often referred to as “the seven dirty words” case).

So the Commission is going with a Hail Mary to the Supreme Court, apparently hoping that the Supremes will tell the Second Circuit that its Fox and NYPD Blue rulings were wrong.

We won’t get deeply into the specifics of the FCC’s arguments to the Supreme Court here. Since the next act of the indecency soap opera could play out over the next year or so, there should be plenty of time for that down the line. But here are a few things to know that might help you appreciate the drama as it unfolds.

First, even though the FCC has asked the Supremes to review the Second Circuit decisions, there’s no guarantee that that request will be granted. Unlike the federal circuit courts of appeal, the Supreme Court is not (except in very, very rare instances, and this isn’t one of them) required to take cases just because one of the litigants asks it to.

A party wanting the Supremes to consider its case files a petition explaining why the issues in the case are important enough to warrant the Court’s attention. (Want to impress your lawyer friends? The technical name for such a petition is “petition for certiorari” – that last word generally, but not invariably, being pronounced “sur-she-or-RARE-eye”. You can also short-hand it as “cert petition”, where “cert” is pronounced like the candy/breath mint.) The Supreme Court rules describe the types of issues that might get you in the door. Essentially, they’re looking for cases involving some “important federal question”, particularly if the lower court has decided that question in a way that conflicts with decisions by the Supreme Court or other courts of appeals.

In its petition (which was co-signed by the Solicitor General, as is customary but not mandatory in such cases), the Commission argues that the Second Circuit’s decisions conflict with the Supreme Court’s 1978 Pacifica decision and a couple of 1990s-era indecency decisions out of the D.C. Circuit. The Commission also claims that the Second Circuit’s “vagueness” analysis was inconsistent with a 2010 Supreme Court decision. And finally, the Commission asserts that, if the Second Circuit rulings remain in effect, the Commission will be unable to do what Congress has told it to do, i.e., enforce the statutory prohibition against the broadcast of indecent material.

The next step in the process will be the filing of oppositions to, and/or statements in support of, the FCC’s cert petition. Oppositions are due within 30 days of the FCC’s filing (i.e., by May 23), unless the time gets extended. Once oppositions are filed, the Court will hunker down, read through the pleadings, and decide whether to take the case. Since the Supreme Court’s annual term traditionally wraps up by the end of June or early July, it’s obviously too late to get the case briefed and argued this term, but there’s at least a chance that the Court might rule, before it closes up shop this summer, on whether or not it will hear the case next term.

If the Court denies the Commission’s petition, that’s just about all she wrote – the Second Circuit decisions will then stand and, if the FCC’s petition is accurate, the Commission will be “preclude[d] . . . from effectively implementing statutory restrictions on broadcast indecency”. If the Court grants the petition, it will set a briefing and argument schedule that would probably call for arguments sometime this Fall. In that case we’d be looking for a decision on the merits from the Court by the end of the term, i.e., by July, 2012.

Oddsmakers usually don’t give cert petitions much chance. The Court gets lots of them, but ends up granting only a tiny percentage. This case may be different, though. The Fox case has already been to the Supremes once, which suggests that the Court may have an interest in taking a look at the constitutionality of indecency regulations. That is, after all, a question which the Court has not revisited in more than 30 years. (On its first trip to the high court in 2009, the Fox case was resolved on non-constitutional grounds, which set the table for the Second Circuit to issue a ruling on constitutional grounds, leading to the current state of affairs.)

That’s the good news for the Commission.

The bad news is that, if the Court does take the case, the Commission may find the Court interested in significantly more than mere indecency. As one of my fellow bloggers observed last year,

in his separate opinion in the Supreme Court’s 2009 Fox decision, Justice Thomas specifically invited reconsideration not only of Pacifica, but also of Red Lion. Red Lion is the 1969 Supreme Court decision upholding the Fairness Doctrine (and, by implication, special regulatory treatment for broadcasting) because of the supposed “scarcity” of broadcast spectrum. Thomas referred in particular to the “questionable viability” of both Red Lion and Pacifica. If four of his colleagues were to agree with Thomas that the scarcity rationale is no longer valid, that could cause massive upheaval in virtually every aspect of the FCC’s operation. 

So there is at least some basis for thinking that the Court could see this case as an opportunity to review the continued viability of the “scarcity rationale” which forms the historical foundation of much of the FCC’s regulation of broadcasting. If that were to happen, it’s at least conceivable that the Commission could lose not only its ability to regulate indecency, but its ability to regulate broadcasting as it has for decades.

So the stakes could definitely be high for all concerned. We’ll keep you updated on the action as it goes down.

ABC appealed the action to the Second Circuit, which had in 2007 invalidated the Commission’s indecency policy on non-constitutional grounds in the Fox case. Action on the ABC appeal was put on hold while the Fox case headed to the Supreme Court (in 2008) only to get bounced back to the Second Circuit (in 2009), which then held the policy to be unconstitutional in July of last year. (The FCC asked the Second Circuit to reconsider its Fox decision, but the Court declined the opportunity, as most of us expected it would.)

In pleadings filed in the ABC case, the FCC acknowledged that the 2010 Fox decision “invalidated the [FCC]’s indecency policy in its entirety.”  That is, there was nothing left of the indecency policy after Fox. And while there may be some arguable factual distinctions between the Fox case and the ABC case – for example, Fox involved mere unscripted language, while NYPD Blue involved “scripted nudity” – the FCC effectively conceded that those were immaterial because the legal principle announced in the Fox case didn’t depend on any particular factual distinctions. (For what it’s worth, the ABC Court expressly rejected the notion that there were in fact any significant distinctions between Fox and ABC.)

Since the ABC case involved the FCC’s application of its indecency policy, and since that policy had already been held to be unconstitutional (in the Fox case), the Second Circuit had little difficulty in concluding that the NYPD Blue fine should be vacated.

According to a brief notation in the decision, the Summary Order does not have any “precedential” effect, which means that the ABC decision itself will not be binding on the Court in any other cases that may arise. But that probably doesn’t make much difference, because it’s clear that Fox is binding. And given the ABC panel’s emphatic affirmation of the broad reach of the Fox decision, the FCC should not expect any different result out of the Second Circuit any time soon. So while the ABC decision may not add any new dimension to the indecency debate, it certainly suggests that the Second Circuit remains solidly committed to the rationale set out in Fox.

Where do we go from here? There are now three separate cases – Fox, ABC and CBS’s continuing saga relative to the Janet Jackson/Super Bowl matter – that could go to the Supreme Court sooner rather than later. Fox and CBS are not quite yet teed up to go straight to the Supremes, and in view of its total reliance on Fox, it seems unlikely that the FCC would attempt to take ABC up by itself. Whether the issue of the FCC’s indecency policy is ultimately brought back to the Supreme Court – and, if it is, whether the Supremes will agree to look at it – is anybody’s guess. But if the issue does make it up there, we could end up with a decision that fundamentally changes FCC jurisprudence as we have known it for decades: not just the law of indecency, but the extent to which the FCC may permissibly regulate any broadcast content.

Stay tuned.

[Blogmeister's Note: This post has been updated to reflect that the Second Circuit denied the FCC's petition for rehearing (on November 22, 2010).  The decision was largely unpublicized and unreported, and we found out about it only through our old friend Andy Schwartzman, who kindly brought it to our attention.]

As the FCC sees it, the Second Circuit panel should have focused narrowly on the particular facts of the case before it and should have assessed the FCC’s analysis of those facts, nothing more and nothing less. Instead, at least according to the Commission, the panel considered other facts and circumstances involving other cases to reach its conclusion that the overall indecency policy – not merely that policy as applied to the Fox facts – was too vague. But, the Commission argues, there is nothing vague about the notion that “fuck” and “shit” – the words uttered by Cher and Nicole Richie in the Fox broadcasts at issue – are indecent; accordingly, even if there might be some question about whether other material might or might not be deemed “indecent”, the same cannot be said of the particular material before the court.

The Commission gussies up this argument with a discussion of the standards for when a rule is “vague” as a constitutional matter, although that discussion includes, at most, only passing mention of the different “overbreadth” standard often used in First Amendment cases.  Suffice it to say that, whatever the other merits of the Commission’s argument on this point, it presupposes that the language at issue here was, in fact, “indecent”.  But since the Commission had determined in at least two cases more or less contemporaneous with its decision in the Fox case that similar language was not indecent, that assumption is obviously open to question.

The Commission also characterizes the panel’s decision as effectively rejecting the “contextual” approach which the FCC says it has taken to indecency enforcement. Other courts – including the Supremes in the Mother of All Indecency Cases, Pacifica, not to mention at least one other Second Circuit panel – have repeatedly emphasized the need for the Commission to consider “context”. Thus, the Commission argues, the Fox panel’s seeming rejection of that approach should be reviewed and reversed as inconsistent with precedent.

The problem with this aspect of the FCC’s argument is that it’s not entirely clear that the panel rejected the importance of “context” as the FCC claims. Rather, the panel appears to have been critical not of the need to consider “context”, but rather of the FCC’s less than clear – opaque, some might say – approach to how “context” is considered. While the Commission undeniably incants the term “context” in its indecency opinions, that incantation often appears to be little more than the legalistic equivalent of “abracadabra”, a rhetorical flourish with no apparent meaning or substance.

As one example – cited by the Second Circuit panel – the Commission’s contextual analysis enabled it to reach diametrically inconsistent conclusions about the use of the term “bullshitter” in a single instance, each time citing an identical contextual aspect. First, the fact that that word was aired during a news interview made it indecent; but on further thought, the Commission concluded that, because it was aired during a news interview, it wasn’t indecent. In the panel’s words, if the Commission does have any actual indecency standard, it is a standard that “even the FCC cannot articulate or apply consistently.”

The Commission’s final argument is one of apparent exasperation. As it reads the panel decision, the Commission can’t win because any changes to make its contextual analysis more predictable would raise further First Amendment concerns, subjecting the FCC to a Catch-22.

This argument is intriguing because, by making it, the Commission could be seen as conceding that, as a practical matter, indecency is not susceptible to regulation within constitutional limitations. To be sure, the Supreme Court in Pacifica held that the Constitution does permit some regulation of broadcast indecency. But the Supremes then left it to the Commission and the courts to develop, on a case-by-case basis, an appropriate analytical approach in which “context” would be all-important. If, after more than 30 years, the best that the FCC has been able to come up with is the “analysis” invoked in Fox, is it possible that the agency is incapable of regulating indecency – beyond the Carlin monologue at issue in Pacifica – constitutionally? The FCC’s rehearing petition seems to imply that.

The Second Circuit now must decide whether or not to grant rehearing, either by the original panel or en banc. While that may sound simple, it’s not. In particular, the en banc rehearing process in the federal courts ranks up there with papal elections when it comes to procedural quirks. The FCC’s petition will first be circulated to all ten active judges on the Circuit as well as Senior Judge Leval, who sat on the original panel. Any of those 11 can ask that his/her colleagues be polled as to whether or not to consider the petition. If nobody asks for such a polling, the petition is denied. If polling is requested, then the ten active judges – but no senior judges (i.e., Judge Leval doesn’t participate) – are polled. Unless a majority of those polled vote for rehearing, the petition is denied. If a majority of the poll votes to grant rehearing, then the case is re-briefed and re-argued in front of all ten active judges and Senior Judge Leval. There is no guarantee that, even if the case gets that far, the FCC would prevail. A majority of the en banc court could just as easily affirm the panel’s decision.

In other words, the FCC has a long row to hoe.

Meanwhile, a couple of other indecency cases also continue to wend their way through the Courts.

A separate panel of three judges in the Second Circuit is currently considering an appeal of the FCC decision that the broadcast of “naked buttocks” during an episode of NYPD Blue was indecent. After the Fox decision came down in July, the NYPD Blue panel asked the parties for supplemental briefs discussing the impact of Fox on the NYPD Blue case. The FCC’s terse, four page, brief noted the Commission’s belief that the facts of the NYPD Blue broadcast, which involved the scripted display of adult nudity, were very different from those at issue in Fox, which involved the utterance of unscripted “fleeting expletives”. Nevertheless, the Commission conceded that the agency’s decisions in both Fox and NYPD Blue were based on the same “contextual framework” that the Court found unconstitutional in Fox. According to the Commission, the Court’s Fox opinion therefore “appears to suggest” that the policy would be unconstitutional as applied to the NYPD Blue case as well.

As a result, the Commission suggests that the NYPD Blue appeal be put on hold until after resolution of any rehearing motion (the Commission’s NYPD Blue supplemental brief was filed several days before the Fox petition for rehearing went in). With both cases pending in the same court, it seems likely that there will not be any decision in the NYPD Blue case until the Fox rehearing request is disposed of.

And just down the road in Philadelphia, the Third Circuit is also dealing with indecency in CBS’s appeal of the Commission’s Janet Jackson/Super Bowl decision. As we reported in the April issue of our Memo to Clients, the Third Circuit, after hearing oral arguments early this year, asked for supplemental briefs on issues that could allow the court to resolve the case without addressing the constitutional questions regarding the FCC’s indecency policies. While the Third Circuit does not appear to have asked the parties to discuss the possible effect of Fox on the Janet Jackson case, CBS (the appellant) did notify the court of the issuance of Fox decision, thus suggesting that the Second Circuit’s decision was at least relevant to the Third Circuit’s deliberations. The FCC responded with a two-page letter in which it observed that the Third Circuit is not bound to follow Second Circuit decisions and that, anyway, the Second Circuit decision is flawed, and, by the way, the Third Circuit is still considering issues that might allow it to resolve the Janet Jackson case on non-constitutional grounds.

While the sparring before the various circuits is important and could prove decisive, the real question is whether – and if so, when – we’ll ever get to the Main Event. That would be review by the Supreme Court of the constitutionality of the FCC’s indecency enforcement policy as it has developed since Pacifica. Such review could have implications for the FCC’s authority far beyond the somewhat narrow issue of indecency. With the FCC’s election to seek rehearing of Fox at the Second Circuit (rather than ask the Supremes to take a look at the case), that Main Event has been deferred at least a year or two.

Frankly, I don’t see much change from Stevens. It’s pretty safe to say that the “liberal block” of the Court will affirm the Second Circuit and strike down the FCC’s regulatory scheme. (That would parallel the vote in the 1978 Pacifica case, where the four liberal survivors from the Warren Court hung together in dissent.)  Let’s also assume that Justice-designate Kagan will: (a) be confirmed and (b) vote the same way that Justice Stevens did in Stevens (no relation, obviously). So right there you’ve got Breyer, Ginsbug, Sotomayor and Kagan ready to slap the FCC down.

I think Fox also gets Justice Thomas. He was the only Justice in the 2009 Fox decision to flat out question the rationale for broadcast content regulation. His separate opinion there indicated that he’s itching to do away not only with the indecency regulations, but also with the scarcity doctrine underpinning all regulation of broadcast content.  Plus, he voted with the majority in Stevens.  And don’t forget his vote in U.S. v. Playboy Entertainment Group, Inc.  There the Court struck down a requirement that cable operators scramble sexually explicit content.  He voted with the majority, saying “I am unwilling to corrupt the First Amendment to reach this result. The ‘starch’ in our constitutional standards cannot be sacrificed to accommodate the enforcement choices of the Government.”

On the other side, I suspect that Justice Alito is the most likely to vote to reverse the Second Circuit and side with the FCC.  He was the lone outlier in Stevens and has generally seemed to be paternalistic and protective of “society’s morals” in similar cases.

That gets us to 5-1, with Chief Justice Roberts and Justices Scalia and Kennedy left. I think you might see one, maybe  two, of them side with the FCC, but not all three.   Why?

Chief Justice Roberts wrote the strong majority opinion in Stevens and was clearly uncomfortable with the lack of regulatory precision in that case.  While it’s possible that he could line up with Alito, I just don’t see it. After all, the Chief was also in the majority in the most controversial First Amendment decision of the most recent term (Citizens United v. Federal Election Commission). There is really no comparison between Fox and Citizens United, but if the Chief is going to go that far out on a limb in favor of the First Amendment, it's going to take him a while to get back in, even if he really wants to come back.

Speaking of Citizens United, that decision was written by Justice Kennedy.  He was also in the majority in Reno v. ACLU and wrote the opinion in the U.S. v. Playboy.

I originally had Scalia solidly on Fox’s side, but I began to rethink this a little. He wrote majority decision in 2009, when Fox first blew through the Court and the FCC won. (As you will recall, the Court then sent the case back down on administrative law grounds without reach the thornier constitutional issues.) But that doesn’t say much: he was very clear that he was ruling on the non-constitutional issues only, and he never hinted at how he might come out on the First Amendment issue here. Some of his votes in other First Amendment cases suggest he might side with Fox here. Remember, Scalia was the swing vote (joining uber-liberal Justices Brennan and Marshall) in Texas v. Johnson, which accorded First Amendment protection to flag burning. He was also clearly with the majority in Stevens.

On the other side, he’s shown that he is willing to “vote morality”. In Barnes v. Glen Theater he concluded that the First Amendment did not prevent restriction of nude dancing.   He also dissented in U.S. v. Playboy Entertainment Group, Inc.  Ultimately, I’m hoping that he’ll vote to strike down the FCC’s indecency scheme because: (1) he justified the moral high ground in Barnes only after declaring nude dancing to be conduct, not expression; (2) he dissented in Playboy only after deciding that the content providers in that case were clearly providing – and intending to provide – hard core sexually-oriented material, not at all the case here; and (3) he was in the majority in Reno v. ACLU back in 1997 where regulation of supposedly “harmful” material on the Internet was declared unconstitutional, in part due to the vagueness of the law.

So maybe more than one of Scalia/Roberts/Kennedy drops off to join Alito in upholding the FCC’s indecency policy.  But I doubt it. And in any event, I clearly don’t think any more than those three join Alito in ruling for the FCC. 

Bottom line: Kevin’s Krystal Ball says that Fox wins in the Supremes.

Clouding the FCC’s choices is the fact that CBS’s appeal in the Janet Jackson case is currently pending in the U.S. Court of Appeals for the Third Circuit. Since that case also involves the indecency policy so thoroughly trashed by the Second Circuit in Fox, the Commission might be inclined to hold off until the Third Circuit shows its hand before making any decisions about the next appellate step through the indecency minefield. (The FCC has 90 days to file its cert petition – and that can be extended another 60 days under some circumstances – so the Commission may sit back and wait at least a little while for a Third Circuit decision to roll in.)

[Blogmeister’s Note: Kevin Goldberg, our crack Supreme Court observer and First Amendment guru, has advised that, according to Kevin’s Krystal Ball, the Second Circuit’s decision would be affirmed in the Supreme Court by at least 6-3, maybe even 7-2, if it were to get that far. Kevin has undertaken considerable analysis to back this up – let us know if you would like us to post that analysis – and he assures us that he is not relying on the soccer-predicting German octopus. Some reports, however, indicate that he has his own octopus powering the Krystal Ball (see illustration at right).]

Of course, the Commission could also just run up the white flag and forget about appealing any further. In that case, its indecency options would be reduced to two: (1) go back to the drawing board and attempt to develop an indecency enforcement policy that passes constitutional muster; or (2) accept the fact that indecency is not susceptible to government regulation.

In view of the zeal with which the FCC has been flexing its anti-indecency muscles in recent years, (2) seems an unlikely choice. That unlikelihood is underscored by Commissioner Copps’s statement concerning the Second Circuit decision. In that statement Copps expressed his hope that the FCC would appeal the case, and he called on the Commission to “move forward immediately to clarify and strengthen its indecency framework”. Hmm . . . we’re guessing that he would opt for choice (1). 

But so far Copps is the only Commissioner who has spoken up on this. Others might reasonably take the position that now would be a good time for the Commission to get out of the business of trying to regulate indecency. This is particularly so since the FCC could claim that such a retreat was strictly a reaction to the Second Circuit’s decision. That is, if any critics tried to beat up on the Commission for giving up too early, the Commissioners could simply respond that the Court made them do it.

While the FCC plans out its next move on the litigation front, what about all those indecency complaint proceedings which have been piling up at the Commission over the last several years?

The good news is that, in the aftermath of the Fox decision, it seems very unlikely that the FCC would attempt to take any enforcement action based on pending complaints. After all, the Second Circuit told the FCC in no uncertain terms that the Commission’s indecency policy is unconstitutional. With the Second Circuit’s order sitting there, the Commission seems to have no choice but to stand down unless/until that order is reversed. So don’t expect to see any more fines or forfeitures or notices of apparent liability or even letters of inquiry relating to allegations of indecency while the Second Circuit’s Fox decision is alive and kicking. 

And similarly, anyone who is already in the middle of an indecency inquiry – say, for example, every Fox affiliate who received the American Dad inquiry – is probably off the hook for responding to the FCC’s questions.  (The Commission could theoretically ask the Second Circuit to stay the effectiveness of its order. The odds that such a request might be granted fall comfortably in the “good luck with that” range.)

Ironically, the FCC’s likely inaction on pending complaints is bad news as well. Lack of FCC action would mean that all the stations whose license renewals have been held up for years solely because of pending indecency complaints would probably not see those renewals granted in the short term. That’s frustrating: once a court has determined that an agency is acting unconstitutionally, regulatees who have suffered and are continuing to suffer from such unconstitutional activity should logically be entitled to prompt relief. While it would be nice if the Commission were to do the right thing here, you probably shouldn’t count on that happening. Pending applications are likely to remain pending.

The Commission could clear up any uncertainty about all these things by issuing a public notice setting forth its plans. If that happens, we’ll let you know. In the meantime it would probably be advisable not to hold your breath.

Acknowledging that the Supreme Court (in the 1978 Pacifica case) had clearly held that the Constitution permits some regulation of indecency, the Second Circuit observes that the media landscape has changed dramatically in the 30 years since Pacifica. The overwhelming penetration level of cable and satellite services and the development of an “omnipresent” Internet offering all sorts of video programming starkly contrast with the state of affairs in 1978, when broadcast media occupied a “uniquely pervasive presence in the lives of all Americans”. The Circuit also notes the technological controls now available to help parents police content in their own homes.

But even within the confines of Pacifica, the Second Circuit concludes that the FCC’s policy on indecent broadcasts exceeds Constitutional limits because the policy is impermissibly vague. 

Significantly, the Circuit’s ruling targets the FCC’s entire indecency standard – not just the “fleeting expletives” component that was the focus of its 2007 opinion. 

In a tour de force of First Amendment analysis, the Second Circuit takes apart virtually every element of the FCC’s policy and the FCC’s defense of that policy. The Circuit finds that the standard itself is so vague that neither the broadcast industry nor the FCC itself could ever be certain which words or images qualify as “patently offensive” under the existing standard. The Court also observes that the FCC’s presumptive prohibition against the words “shit” and “fuck” can’t survive because the FCC can’t justify why some uses of those words have been prohibited and some not.

For example, how could the FCC permit the broadcast of repeated uses of certain “bad” words by fictional soldiers in Saving Private Ryan, but proscribe the use of those same words by real life musicians in a documentary about the blues? The Commission has on occasion attempted to explain its actions on the basis of such factors as whether the words are “integral” to a particular program or whether the program is a “bona fide news interview”. But in the Circuit’s view, “[t]here is little rhyme or reason to these decisions”.

The Second Circuit describes the enormous First Amendment harms that naturally flow from “the FCC’s indiscernible standards”. The Court notes the inherent risk that vague standards applied on an “ad hoc” basis by government officials allows for the suppression of particular points of view: “it is hard not to speculate that the FCC was simply more comfortable with the themes in ‘Saving Private Ryan,’ a mainstream movie with a familiar cultural milieu, than it was with ‘The Blues,’ which largely profiled an outsider genre of musical experience.” 

The Circuit also recognizes that the FCC’s vague standards force broadcasters to choose between (a) censoring controversial programs and (b) risking massive fines or loss of licenses – the unsurprising result being that many broadcasters choose to self-censor. According to the Court, concern about possible FCC enforcement efforts has prompted stations to edit or refuse to air a wide range of programming, including a documentary on the September 11th World Trade Center attack, literary readings, live news programs, political debates, sitcoms and dramatic programs. 

And with that, the Second Circuit has struck down the FCC’s indecency policy. While the Court acknowledges that, unless and until Pacifica is overruled, the FCC could conceivably create a constitutional policy, the agency’s current policy does not pass Constitutional muster.

The Second Circuit’s decision represents an unambiguous defeat of the FCC’s current indecency policy – but it’s not likely the last word on the subject. The FCC will almost certainly appeal to the Supreme Court. And let’s not forget that the Third Circuit still has the Janet Jackson Super Bowl case pending – raising the possibility of conflicting decisions between the two federal courts. Such a “circuit split” would virtually guarantee a Supreme Court review. 

The prospect of Supreme Court review focusing on the constitutionality of indecency regulation is particularly exciting because, in his separate opinion in the Supreme Court’s 2009 Fox decision, Justice Thomas specifically invited reconsideration not only of Pacifica, but also of Red Lion. Red Lion is the 1969 Supreme Court decision upholding the Fairness Doctrine (and, by implication, special regulatory treatment for broadcasting) because of the supposed “scarcity” of broadcast spectrum. Thomas referred in particular to the “questionable viability” of both Red Lion and Pacifica. If four of his colleagues were to agree with Thomas that the scarcity rationale is no longer valid, that could cause massive upheaval in virtually every aspect of the FCC’s operation. 

In the meantime, broadcasters should not take the decision as a green light to start airing “R” rated movies at mid-day. The Second Circuit struck down the FCC’s policy interpreting the federal statute prohibiting “obscene, indecent or profane language” but not the statute itself. In other words, it’s still technically illegal to broadcast such fare, even if there is no obvious way in which the government could penalize it in the wake of the Second Circuit’s decision. As has always been the case, broadcasters will need to continue to exercise good judgment in their selection of programming. We, as always, will stay tuned.

When the Second Circuit gave the FCC the big thumbs down in 2007, its opinion was not limited to the relatively narrow non-constitutional law question on which the case was ultimately decided. Rather, the court took the somewhat unorthodox step of offering a detailed analysis of the constitutionality of the FCC’s indecency policy, an analysis which brutally ripped that policy apart. The constitutional analysis was what lawyers refer to as “dicta” – meaning that it technically wasn’t an essential aspect of the court’s holding, and so had no precedential impact. Still, that analysis clearly telegraphed what the Second Circuit thought of the FCC’s policy, constitutionally speaking.

So when the Supremes sent the case back to the Second Circuit (the logical expectation being that the parties would re-address the constitutional issue), the likely outcome of that second visit to the Second Circuit was anticipated to be a foregone conclusion. 

And after the January 13 oral argument, it’s looking like that foregone conclusion is a pretty good bet: many observers expect that the Second Circuit will hold the “fleeting expletives” to be unconstitutional.  (You don't have to trust us on this one -- the oral argument is available on-line for your viewing enjoyment.) 

The issue most troubling to the Second Circuit this time around appeared to be the FCC’s failure to provide a coherent and specific standard as to when something was indecent. One judge characterized the Commission’s indecency decisions since the Supreme Court’s 1978 Pacifica decision as a matter of “bewildering vagueness”. The Second Circuit panel peppered FCC counsel with hypothetical programs they worried might be found indecent under the current regime. For instance, Judge Leval (the source of the “bewildering vagueness” characterization) asked whether a production of Hamlet might be found indecent, and Judge Hall queried whether a news report on Wednesday’s oral arguments would be allowed to include the original uncensored clips from the 2002 and 2003 broadcasts.  

The FCC’s counsel suggested in response that both of those examples would probably not be found held indecent, noting that the Commission “bends over backwards” to protect news programs and editorial decisions. The Court, reflecting apparent skepticism, asked pointedly whether the First Amendment allows it to rely on an agency’s promise to “bend over backwards.”  

Counsel for Fox (and NBC and CBS, who participated as intervenors), as well as the judges, also expressed some concern over the impact of the FCC’s enforcement policy on smaller local broadcasters. The limited resources of small broadcasters, the argument went, might prevent them from implementing a delay system – and, without that safety net, the threat of enhanced penalties could lead them to self-censor their broadcasts, and particularly their news coverage. The court seemed unconvinced (as Justice Scalia seemed to suggest in his opinion) that this concern might be alleviated because folks living in smaller towns were less likely (at least according to Scalia) than “foul-mouthed glitteratae from Hollywood” to use such expletives. 

The Court and FCC counsel also parted ways on whether the Supreme Court’s decision in Pacifica governs the current case. The FCC clung to that decision, claiming that Pacifica’s approval of indecency regulation, combined with the FCC’s (supposed) guidance since then about what is and is not indecent, foreclosed the argument that the current regime was unconstitutionally vague. The Second Circuit strongly disagreed, with Judge Leval at one point telling the FCC to “stop telling us Pacifica ruled on this – it didn’t,” and advising Commission counsel that if he didn’t think the Pacifica decision was extremely narrow, he needed to read it again. Judge Leval explained that whereas Pacifica narrowly approved of the regulation of a specific list of “seven dirty words”, it had not addressed the “great miasma” of things now regulated in the “broadness of the Commission’s menace.” 

When the discussion turned to the supposed purposes of the indecency policy, things didn’t get better for the agency.  The Commission claimed that the main purpose of the policy was to protect children from hearing expletives, to which Judge Hall asked in response how that purpose was served by the “exception” for news programming, questioning whether children could tell the difference in the use of expletives in different types of programming. The Court also queried FCC counsel about why use of the V-Chip was not a better, less-restrictive solution to enable parents to protect their children from broadcast expletives. Judge Leval asked whether, if technology exists that could allow parents to filter programming for their children, parents with the lowest tolerance for questionable language – those who may not let their children outside due to fear they might “hear a nasty” – should be allowed to dictate what other viewers and listeners should hear.  

While the Second Circuit’s decision probably won’t be issued for a couple of months, there is little doubt that it will find the FCC’s current indecency regime, at least as it applies to “fleeting expletives”, unconstitutional.   Of course, that is not likely to be the end of things. The next decision out of the Second Circuit is almost certain to be appealed to the Supreme Court, which will have the opportunity to address the constitutional issues it declined to address the last time.  

Meanwhile, moving along on a parallel track is CBS’s appeal of the FCC’s decision fining it for broadcast of Janet Jackson’s infamous “wardrobe malfunction” in 2004. As we all know, the Third Circuit initially found that fine to be arbitrary and capricious, but was asked by the Supreme Court to rethink that decision in light of the remand of the Second Circuit’s original decision.  Oral arguments in the Third Circuit are scheduled for February 23, which could mean a new Third Circuit decision sometime in the late spring or summer.   It is possible that both Courts’ decisions could be consolidated in a single Supreme Court case, probably in the 2010-2011 term.

The decision was issued in a case pitting a number of record companies (think BMG, Arista, Bad Boy, Zomba) against the popular LAUNCHcast service. The record companies claimed LAUNCHcast was interactive. The court disagreed. 

The Copyright Act defines an interactive service as one which “enables a member of the public to receive a transmission of a program specifically created for the recipient, or on request, a transmission of a particular sound recording . . . , which is selected by or on behalf of the recipient.”  The parties agreed that LAUNCHcast, in some form, generated a list of songs to be performed based on the initial song or artist choice by the listener.  But was that enough to make it “interactive”? Nope.

The Court engaged in a searching review of the factors leading to the creation of the interactivity/non-interactivity distinction in the Digital Performance Right in Sound Recordings Act of 1995 and its refinement in the 1998 Digital Millennium Copyright Act – two seminal laws intended to protect sound recording copyright holders. The competing goals of the law are: (1) to increase the number of distribution channels for music and (2) to discourage rampant copying of music without compensation to the copyright holder.

The Court concluded that a major consideration – perhaps the major consideration – is the ability of a digital listener to capture and save a high quality copy of a sound recording with little to no effort if he or she knows it is about to be played. That is, if a listener can manipulate the webcast service in a way which permits him/her to snag his/her own digital copy of a song of his/her choosing, then it’s likely an “interactive” service. Stated another way, the Court focused on whether the webcasting service offers listeners an opportunity to steal music they would otherwise purchase.

Analytically, the Court reviewed factors which the Copyright Office had deemed relevant over the years. Although asked to clarify the “interactive/non-interactive” distinction, the Copyright Office has declined to take the bait, explaining that technology changes too rapidly to allow for a hard and fast rule. But it did indicate that some level of listener influence is permitted within the definition of non-interactive. In particular, the Copyright Office had even indicated that LAUNCHcast itself would qualify as “non-interactive”.

How exactly does LAUNCHcast work? The short strokes are that users:  

• Must log in with a unique username/password;
• Must enter basic information about preferences unrelated to music;
• Must enter information regarding the user's favorite artists;
• Must identify the user's favorite musical genres and rating them in order of preference; and
• Are able to rate songs or artists they hear (or even instantly purchase a song they like).

That final step (i.e., the rating process) continually refines and changes the individual stream offered to the individual listener.  Based on all these preferences and refinements, the LAUNCHcast software creates a playlist of 50 songs every time the listener logs on. The listener has no idea what those songs will be or which artists will be featured.

There is actually much more to the software, involving ratios, quotients and other mathematical formulas that aid in the refinement and ordering of the playlists. The Court of Appeals spent a good ten pages describing the process in impressive detail. Though we’re glossing over the particulars, we’ll note that it is this very level of detail which led the Court to conclude that LAUNCHcast is not an interactive service.  As the Court saw it, the LAUNCHcast system does not allow a user either to pick a song and then immediately hear that song, or to predict whether (much less when) any particular song may be played, and or (most definitely) to engage in music piracy. (Indeed, the instant-purchase function probably promotes the legal purchase of copyrighted music).

While LAUNCHcast may be more complex than some other few music services, the Court’s discussion does highlight some key characteristics which webcasters can take note of in determining whether their services may be deemed interactive: 

• In defining “interactive”, Congress “intended to include bodies of pre-packaged material, such as groups of songs or playlists specifically created for the user”;
• About 60 percent of the various factors used in the LAUNCHcast programming to create and modify a user’s playlist are out of the listener’s control (the only absolutely certain control available to a user is the “zero” rating: by giving a song a “zero” rating, the user guarantees that he or she will not hear it again);
• A new playlist of 50 songs is created every time the listener logs in, which prevents any ability to predict what will be heard during any particular session.

Emphasizing the limited involvement of the listener in the LAUNCHcast song selection process, the Court contrasted listening to LAUNCHcast to listening to radio back in the halcyon days. According to the Court, LAUNCHcast listeners do not enjoy even the “limited predictability that once graced the AM airwaves on weekends in America when ‘special requests’ graced lovestruck adolescents’ attempts to communicate their feelings to ‘that special friend’”. Ah yes, the good old days. But the Court’s comparison prompts this reminder to broadcasters who stream their over-the-air programming: be careful about inviting “special requests” from listeners, since granting such requests could lead the webcasting element of your operation to be deemed “interactive”, with all that that entails.