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No. 98-1682
In the Supreme Court of the United States
OCTOBER TERM, 1998
UNITED STATES OF AMERICA, ET AL., APPELLANTS
v.
PLAYBOY ENTERTAINMENT GROUP, INC.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
JURISDICTIONAL STATEMENT
CHRISTOPHER J. WRIGHT
General Counsel
Federal Communications
Commission
Washington, D.C. 20544
SETH P. WAXMAN
Solicitor General
Counsel of Record
WILLIAM B. SCHULTZ
Acting Assistant Attorney
General
EDWIN S. KNEEDLER
Deputy Solicitor General
JAMES A. FELDMAN
Assistant to the Solicitor
General
JACOB M. LEWIS
EDWARD HIMMELFARB
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTIONS PRESENTED
Section 505 of the Telecommunications Act of 1996, Pub. L. No. 104-104, Tit. V, 110 Stat. 136, requires that a cable television operator "providing sexually explicit adult programming or other programming that is indecent on any channel of its service primarily dedicated to sexually-oriented programming" either "fully scramble or otherwise fully block the video and audio portion of such channel so that one not a subscriber * * * does not receive it," or, alternatively, not provide that programming "during the hours of the day (as determined by the [Federal Communication] Commission) when a significant number of children are likely to view it."
The questions presented are:
1. Whether Section 505 violates the First Amendment.
2. Whether the three-judge district court was divested of jurisdiction to dispose of the government's post-judgment motions under Rules 59(e) and 60(a) of the Federal Rules of Civil Procedure by the government's filing of a notice of appeal while those motions were pending.
PARTIES TO THE PROCEEDINGS
Appellants are the United States of America, Janet Reno, Attorney General, the United States Department of Justice, and the Federal Communications Commission. Appellee is Playboy Entertainment Group, Inc. Spice Entertainment Companies, Inc. (formerly Graff Pay-Per-View), was a party below but, after failing to obtain a preliminary injunction, chose not to participate in litigation of the merits. Spice has since been purchased by Playboy.
In the Supreme Court of the United States
OCTOBER TERM, 1998
NO. 98-1682
UNITED STATES OF AMERICA, ET AL., APPELLANTS
v.
PLAYBOY ENTERTAINMENT GROUP, INC.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
JURISDICTIONAL STATEMENT
OPINIONS BELOW
The opinion of the three-judge district court (App., infra, 1a-39a) is reported at 30 F. Supp. 2d 702. The permanent injunction (App., infra, 87a-88a) and the order denying the government's post-trial motions (App., infra, 91a-92a) are unreported. The opinion of the district court denying a preliminary injunction (App., infra, 40a-86a) is reported at 918 F. Supp. 772. The opinion of the district court granting a temporary restraining order is reported at 918 F. Supp. 813. The order of this Court affirming the denial of a preliminary injunction is reported at 520 U.S. 1141.
JURISDICTION
The permanent injunction of the three-judge district court, dated December 29 1998, was entered on December 30, 1998. The government filed a notice of appeal on January 19, 1999 (a Tuesday after a Monday holiday). On March 10, 1999, Justice Souter extended the time for filing a jurisdictional statement to and including April 19, 1999. On March 18, 1999, the district court entered an order dismissing the government's motions to alter or amend the judgment and to correct the judgment. On April 7, 1999, the government filed a second notice of appeal, from both the original injunction and the order dismissing the government's post-trial motions. The jurisdiction of this Court rests on Section 561(b) of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 143, and 28 U.S.C. 1253.
CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED
The First Amendment of the United States Constitution provides that "Congress shall make no law * * * abridging the freedom of speech." Sections 504, 505, and 561 of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 136, 142, are reproduced at App., infra, 96a-101a.
STATEMENT
This action arises out of Congress's efforts to address the problem of "signal bleed" of cable television channels that are devoted to sexually explicit, "adult" programming. Signal bleed is a phenomenon occurring in most cable television systems. It is associated with the practice of cable television operators of "scrambling" or otherwise blocking the signal for their "premium" channels (channels for which an additional charge is imposed) to ensure that cable customers who have not subscribed to those channels do not receive programming for which they have not paid. Signal bleed occurs when non-subscribers receive a signal that is only partially scrambled: the video signal can be discerned at random intervals, and the audio signal is often not scrambled at all.
1. Approximately 62 million households nationwide receive cable television. App., infra, 53a. Cable customers typically are offered a "basic" package of channels for a monthly fee, but they also may subscribe at an additional monthly fee to premium channels that provide sports programming, recently released movies, or adult, sexually explicit entertainment. Id. at 5a. Cable customers may also order premium programming on a pay-per-view basis, permitting the customer access to a particular movie or sporting event for a specified additional fee. Ibid.
To ensure that cable customers who have not paid for premium programming are not able to view it, most cable operators scramble the programming at their central transmission facility using either "RF" or "baseband" technology. RF scrambling causes the picture to jump and roll on the television sets of customers who are not authorized to receive the premium channel, although the images on the screen can at times be discerned. The cable system provides customers who are authorized to receive the premium channel with a set-top device, called a converter, which is connected between the subscriber line and the television set to counteract the scrambling and permit clear reception of the channel. RF scrambling does not affect the audio portion of the signal, and, as a result, the scrambling does not prevent the audio portion from being heard clearly on all customers' television sets at all times. App., infra, 7a.
Modern baseband scrambling, in contrast, renders the video portion of the signal unintelligible. As with RF scrambling, subscribers authorized to receive the programming are given converters to permit clear reception. Some baseband scrambling systems also encrypt the audio portion of the signal, so that no intelligible audio is presented to customers who do not subscribe to the scrambled premium service. For the most part, however, cable operators use RF scrambling, or prior generations of baseband scrambling, which do not render the video completely unintelligible and do not scramble the audio at all. App., infra, 7a-8a.
The limitations of these scrambling systems give rise to the "signal bleed" problem. In any system where premium programming is carried, all customers of the system receive the scrambled signal on all televisions hooked up to the customer's line. As a result, all customers who are non-subscribers to a premium service typically receive a partially scrambled video signal and a completely clear audio signal. App., infra, 9a.
2. Congress enacted the statutory provision at issue in this case, Section 505 of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 136, to address the problem of signal bleed in the context of cable channels that are devoted to sexually explicit, "adult" programming. Congress was "aware that some cable systems [were] permitting 'adult' programs that [were] clearly unsuitable for children to be received in the home without sufficient scrambling." S. Rep. No. 367, 103d Cong., 2d Sess. 103 (1994). Senator Feinstein, one of the sponsors of Section 505, explained that "[p]arents * * * come home after work only to find their children * * * watching or listening to the adults-only channel, a channel that many parents did not even know existed." 141 Cong. Rec. S8167 (daily ed. June 12, 1995). As an example, she referred to the fact that a "partially scrambled pornography signal was broadcast only one channel away from a network broadcasting cartoons and was easily accessible for children to view." Ibid.
Congress's concerns were triggered by complaints from across the country. For example, Mr. Anthony Snesko had made 550 copies of a videotape showing the Spice Channel as it appeared on his television in Poway, California, at 9:00 in the morning sometime in April or May, 1994, and had distributed a copy to every Member of the House and Senate. DX 1, 47.1 In December 1995, a mother from Cape Coral, Florida, complained to her Representative that she had recently found her eight-year-old son, seven-year-old daughter, and a playmate watching Spice at 4:00 in the afternoon, "transfixed" by scenes of "a naked man sodomizing a woman" together with the "groans and epithets that go along." DX 55. In 1993, Senator Biden urged the Federal Communications Commission to review a cable company's compliance with federal law after large numbers of Delaware residents voiced objections about unwanted reception of Spice. DX 72. See also DX 59, 61, 70 (constituent letters complaining about inadequately scrambled "sex channels" and their availability to children).
In her floor statement, Senator Feinstein acknowledged that it was also open to Congress to require cable operators to provide complete blocking of audio and video signals free of charge on any channel-not merely those showing sexually explicit programming-at the request of a subscriber. That is the approach Congress ultimately included in Section 504 of the Telecommunications Act of 1996, 110 Stat. 136. But Senator Feinstein explained that the proposal for blocking on demand did not "go[] far enough," because it would "put the burden of action on the subscriber * * * by requiring a subscriber to specifically request the blocking of indecent programming." 141 Cong. Rec. at S8167.
3. Section 505 became law on February 8, 1996, when the President signed the Telecommunications Act of 1996, 110 Stat. 56. Under Section 505, "[i]n providing sexually explicit adult programming or other programming that is indecent on any channel of its service primarily dedicated to sexually-oriented programming, a multichannel video programming distributor"-a term that includes a cable operator-"shall fully scramble or otherwise fully block the video and audio portion of such channel so that one not a subscriber to such channel or programming does not receive it." 110 Stat. 136 (codified at 47 U.S.C. 561 (Supp. II 1996)). Until the cable operator complies with those requirements, it "shall limit the access of children" to such programming "by not providing such programming during the hours of the day (as determined by the [Federal Communications] Commission) when a significant number of children are likely to view it." Ibid.
On March 5, 1996, the Federal Communications Commission issued an interim rule for implementation of Section 505. Order and Notice of Proposed Rulemaking, In re Implementation of Section 505 of the Telecommunications Act of 1996, 11 F.C.C.R. 5386 (Implementation of Section 505). First, the Commission interpreted the term "sexually explicit adult programming," as used in Section 505, to be a category of "programming that is indecent," a phrase also used in the statute. Implementation of Section 505 ¶¶ 6, 9. The Commission defined "indecent programming" on an interim basis to mean "any programming that describes or depicts sexual or excretory activities or organs in a patently offensive manner as measured by contemporary community standards for the cable medium," and proposed to adopt that definition on a permanent basis. Id. ¶ 9. As the Commission explained, that is essentially the same definition adopted by the Commission for purposes of regulating indecent broadcast programs and telephone messages.
The Commission also proposed, and provisionally adopted, a safe harbor for purposes of Section 505's time-channeling requirement of 10 p.m. to 6 a.m., the same safe-harbor hours previously established for airing indecent broadcast television or radio programs. Implementation of Section 505 ¶¶ 5, 8; see also 47 C.F.R. 73.3999. The final rules implementing Section 505 became effective on May 18, 1997. In re Implementation of Section 505 of the Telecommunications Act of 1996, 12 F.C.C.R. 5212 (Apr. 17, 1997).
4. Appellee Playboy Entertainment Group provides "virtually 100% sexually explicit adult programming," App., infra, 5a-6a, for transmission by cable operators to premium subscribers who choose to order Playboy's programming. Playboy provides such programming via its Playboy Television and AdulTVision networks. Id. at 5a. On February 26, 1996, Playboy filed suit in the United States District Court for the District of Delaware seeking declaratory and injunctive relief against the operation of Section 505. The complaint alleged that Section 505 violated Playboy's rights under the First Amendment and the equal protection component of the Due Process Clause of the Fifth Amendment. The district court consolidated the action with a similar action brought by Spice Entertainment Companies (formerly known as Graff Pay-Per-View), which operated channels similar to those operated by Playboy.2 A three-judge court was convened pursuant to Section 561 of the Telecommunications Act, 110 Stat. 142, 47 U.S.C. 223 note (Supp. II 1996).
On November 8, 1996, the three-judge court issued a decision denying Playboy's motion for a preliminary injunction, stating that Playboy and Spice "ha[d] not persuaded us that they are likely to prevail on the merits." App., infra, 63a.3 Reviewing Section 505 under "strict scrutiny or something very close to strict scrutiny" as a content-based restriction on speech, id. at 67a, the court held that Section 505 is carefully tailored to further the compelling interest in protecting children. The court explained that Section 505 "does not seek to ban sexually explicit programming, nor does it prohibit consenting adults from viewing erotic material on premium cable networks if they so desire." Id. at 78a. Instead, the court explained, Section 505 permits cable operators to provide sexually explicit programming to willing subscribers if the operators avail themselves of either of two remedies to protect nonsubscribers-full scrambling of audio and video or time-channeling. Id. at 76a.
5. Playboy appealed the denial of its request for a preliminary injunction directly to this Court, which summarily affirmed. 520 U.S. 1141 (1997).
6. The case was tried before the district court on March 4-6, 1998. On December 28, 1998, the district court issued a decision holding that Section 505 is unconstitutional under the First Amendment.
The court held, as it had at the preliminary injunction stage, that "either strict scrutiny or something very close to strict scrutiny," should be applied. App., infra, 23a. The court also held that Section 505 is constitutional only if the government proves that it "is a 'least restrictive alternative,' i.e., that no less restrictive measures are available to achieve the same ends the government seeks to achieve." Id. at 26a.
The court noted that the government asserted three compelling interests supporting Section 505: "the Government's interest in the well-being of the nation's youth-the need to protect children from exposure to patently offensive sex-related material"; "the Government's interest in supporting parental claims of authority in their own household-the need to protect parents' right to inculcate morals and beliefs on their children"; and "the Government's interest in ensuring the individual's right to be left alone in the privacy of his or her home-the need to protect households from unwanted communications." App., infra, 26a-27a. Although it expressed some doubt about the strength of the empirical evidence in the record regarding harm to minors, see id. at 30a, the court held that all three of those interests are present and, in sum, are compelling. Id. at 32a.
The court held, however, that Section 505 is not the least restrictive alternative that the government could have adopted to advance those interests. App., infra, 35a. The court noted that Section 505 requires complete scrambling of the video signal even to households without children, and the court concluded that Section 505's alternative of time channeling restricts "a significant amount of protected speech," because "30-50% of all adult programming is viewed by households prior to 10 p.m." Id. at 33a. In the court's view, Section 504, by contrast, is a content-neutral provision that permits subscribers voluntarily to request a free blocking device, thus avoiding the need for full scrambling or time channeling. Id. at 34a-35a.
The court acknowledged that an alternative must be not only less restrictive but also "a viable alternative." App., infra, 35a. In this respect, the court acknowledged that under Section 504 "parents usually become aware of the problem only after the child has been exposed to signal bleed, and then the damage has been done," and that even if parents are aware of the problem, "the success of § 504 depends on parental awareness that they have the right to receive a lockbox free of charge." Ibid. The court was unable to find that the experience during the 14-month period in which Section 504 was in effect but Section 505 was enjoined (see note 3, supra) was sufficient to alleviate the court's concerns regarding the adequacy of notice to customers under Section 504. Specifically, notwithstanding the applicability of Section 504 during that time, cable operators still had distributed blocking devices on request to fewer than one-half of one percent of subscribers.4 The court stated, however, that the "minimal lockbox distribution is equally consistent with an ineffective statute as it is with a societal response that signal bleed is not a pervasive problem." Id. at 36a. In the court's view, then, either there has not been "adequate notice to subscribers" or "[p]arents may have little concern that the adult channels be blocked." Ibid.
The court set forth in some detail what would constitute "adequate notice" under Section 504. First, the court explained, it should include a basic notice to subscribers that children may be viewing signal bleed from sexually explicit programming and that blocking devices are readily available free of charge. App., infra, 36a-37a. Next, the court stated that such notice would have to be provided by "[a]ppropriate means," including "inserts in monthly billing statements," "on-air advertisement on channels other than the one broadcasting the sexually explicit programming," and "a special notice" when a cable operator "change[s] the channel on which it broadcasts sexually explicit programming." Id. at 37a. The cable operator would have to provide the means whereby "a request for a free device to block the offending channel can be made by a telephone call" to the cable operator. Ibid. Finally, the notice should be given "on a regular basis, at reasonable intervals" and whenever a cable operator "change[s] the channel on which it broadcasts sexually explicit programming." Ibid.
The court held that when enhanced with such "adequate notice," Section 504 would be "a less restrictive alternative to § 505." App., infra, 38a. The court explained that "with adequate notice of the issue of signal bleed, parents can decide for themselves whether it is a problem," and "to any parent for whom signal bleed is a concern, § 504, along with 'adequate notice,' is an effective solution." Id. at 37a-38a. The court recognized that it could not require cable operators to provide "adequate notice," because as non-parties the operators were not subject to the court's jurisdiction. But the court pointed out that it did have jurisdiction over Playboy, and declared that it would require Playboy to include notice provisions in its contractual arrangements with cable operators. The district court then reiterated that unless adequate notice is provided, Section 504 would not be a viable alternative to Section 505. Id. at 38a.
7. On December 29, 1998, the day after announcing its decision, the court issued an order permanently enjoining enforcement of Section 505. App., infra, 87a-88a. The order did not contain any requirement that Playboy include "adequate notice" provisions in its contracts with cable operators. Nor did it limit the scope of the injunction to Playboy, which is the only programmer of sexually explicit broadcasting that remains a party to this lawsuit.
On January 12, 1999, the government filed a motion under Rule 59(e) of the Federal Rules of Civil Procedure seeking to alter or amend the judgment to limit the injunction to Playboy, and it filed a motion under Rule 60(a) seeking to correct the judgment by including the requirement mentioned in the court's opinion-that Playboy ensure that its contracts require cable operators to provide "adequate notice" to cable customers. The government then filed a notice of appeal on January 19, 1999, 20 days after entry of the injunction, as provided in Section 561(b), 110 Stat. 143, of the Act. App., infra, 89a-90a; see page 1, supra.
On March 18, 1999, the district court dismissed the government's two motions, stating that it "lack[ed] jurisdiction to adjudicate these motions due to subsequent filing of Defendants' notice of appeal to the United States Supreme Court." App., infra, 91a-92a. On April 7, 1999, the government filed a second notice of appeal, addressed to both the original injunction and the March 18 order. Id. at 93a-95a.
THE QUESTIONS PRESENTED ARE SUBSTANTIAL
The three-judge district court has held Section 505 of the Telecommunications Act of 1996 unconstitutional and enjoined its application throughout the country. The court based that holding solely on its conclusion that a hypothetical statute similar to Section 504 of the Act, but with complex, enhanced notice requirements, would be a less restrictive alternative to Section 505. The court's analysis was deeply flawed, and its judgment invalidating an Act of Congress warrants plenary review by this Court.
First, the court applied the strictest form of scrutiny, ruling that Section 505 could survive only if it were less restrictive than any alternative, including the court's untried theoretical construct of a Section 504-type regulation enhanced by an extensive but imprecise notice requirement. In Denver Area Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727, 755 (1996), the plurality reserved the question whether strict scrutiny applies to regulation of indecency on cable television. The district court here decided that question and did so incorrectly, thus subjecting indecent programming distributed by cable to a different First Amendment standard than identical material broadcast through the air. Had it not done so, the court would have concluded that Section 505 is constitutional.
Second, the district court's ruling is illogical even on its own terms, because it has not been established that even the enhanced version of Section 504 that the court hypothesized would in practice be less restrictive than Section 505, and it would not in any event protect the compelling interests that the court itself recognized. Based on the court's own findings, if any significant number of subscribers opted to request blocking of signal bleed, economics would lead to the means of compliance that the district court found to have resulted under Section 505-cable operators would time channel sexually explicit programming services or simply drop them altogether. In addition, in analyzing whether its hypothetical enhanced Section 504-type regulation would adequately serve the interests protected by Section 505, the court entirely ignored society's independent interest in protecting minors from exposure to explicit sexual material. Had the court taken that interest into account, it would have found any version of Section 504 to be an inadequate alternative.
A. 1. As a general matter, "[t]he government may * * * regulate the content of constitutionally protected speech in order to promote a compelling interest if it chooses the least restrictive means to further the articulated interest." Sable Communications, Inc. v. FCC, 492 U.S. 115, 126 (1989). This Court has never applied that "strict scrutiny" standard, however, to the regulation of indecency on radio or television. Instead, in FCC v. Pacifica Foundation, 438 U.S. 726, 750 (1978), the Court stated that "special treatment of indecent broadcasting" is "amply justif[ied]" and upheld a time-channeling regulation of indecency on broadcast radio that would have been constitutionally infirm in many other contexts. See ibid. The Court explained that among the justifications for such "special treatment" are the facts that "the broadcast media have established a uniquely pervasive presence in the lives of all Americans"; that indecency on television or radio "confronts the citizen * * * in the privacy of the home"; that "[b]ecause the broadcast audience is constantly tuning in and out, prior warnings cannot completely protect the listener or viewer from unexpected program content"; and that "broadcasting is uniquely accessible to children, even those too young to read." Id. at 748-749.
The Court has repeatedly reaffirmed the principles of Pacifica. For example, in Sable, the Court noted that Pacifica's "special treatment of indecent broadcasting" is justified because the regulation at issue there "did not involve a total ban on broadcasting indecent material," but instead "sought to channel it to times of day when children most likely would not be exposed to it." 492 U.S. at 127. In addition, the Court pointed out that Pacifica "relied on the 'unique' attributes of broadcasting, noting that broadcasting is 'uniquely pervasive,' can intrude on the privacy of the home without prior warning as to program content, and is 'uniquely accessible to children, even those too young to read.'" Ibid. (quoting Pacifica, 438 U.S. at 733). More recently, in Reno v. ACLU, 521 U.S. 844 (1997), the Court held that "the most stringent review" applies to regulation of indecency on the Internet, but it reaffirmed that "special treatment of indecent broadcasting" by means of non-criminal regulation is appropriate, essentially for the reasons given above, id. at 866-868.
2. The Court has not yet definitively decided whether the more relaxed standard that applies to time-channeling regulation of indecency on broadcast radio and television also applies to regulation of indecency on cable television. In Denver Area, the plurality stated that it "need [not] determine whether, or the extent to which, Pacifica does, or does not, impose some lesser standard of review where indecent speech is at issue" in a challenge to regulations of cable television. 518 U.S. at 755. But the plurality in Denver Area also relied heavily on Pacifica to uphold one of the cable television regulations at issue there. Id. at 744-748. Moreover, it distinguished Sable, in which the Court held unconstitutional a ban on indecent telephone messages, on the ground that Sable, unlike Denver Area, involved "a total governmentally imposed ban on a category of communications, but also involved a communications medium, telephone service, that was significantly less likely to expose children to the banned material, was less intrusive, and allowed for significantly more control over what comes into the home than either broadcasting or the cable transmission system before us." Id. at 748. The plurality concluded that, with respect to the way in which "parents and children view television programming, and how pervasive and intrusive that programming is[,] * * * cable and broadcast television differ little, if at all." Ibid.
As the plurality noted in Denver Area, the factors on which the Court based its decision to apply "special treatment" to time-channeling of indecent over-the-air radio and television programming apply with at least equal force to indecent cable television programming. See 518 U.S. at 744-745, 748. Children may just as easily obtain access to indecency broadcast on cable television as to similar materials on broadcast channels. Moreover, the regulation at issue in this case, like the regulation at issue in Pacifica, is not a criminal prohibition or an outright ban on indecent speech; it permits cable operators to "time channel" indecent material to the same late-night hours as in Pacifica, and it also permits operators to provide indecent material at any time, so long as they eliminate unwanted signal bleed. Finally, as in Pacifica, "warnings could not adequately protect the listener from unexpected [signal bleed]." Reno, 521 U.S. at 867.
3. The district court in this case gave no weight to the concerns on which the Court relied in sustaining special treatment of regulation of broadcast indecency in each of the above cases. The district court did note that "the context of [Section 505's] content-based restriction must * * * be considered," because "[c]able television is a means of communication that is both pervasive and to which children are easily exposed." App., infra, 26a. But the court proceeded to attach essentially no significance to that "context" in holding that "[t]he Government must prove that * * * no less restrictive measures are available to achieve the same ends the government seeks to achieve." Ibid. Indeed, the court applied its "least restrictive alternative" test in a particularly rigorous manner, holding that Section 505 was unconstitutional solely because the court could imagine an alternative, entirely hypothetical scheme whose practicality, cost, and legality have never been tested.
Whether a scheme of adequate notice could be devised without resulting in exorbitant costs or raising other legal problems is open to substantial doubt. In this regard, it is significant that the district court's scheme, though modeled on Section 504, would be far more complex and uncertain. It would involve requirements, enforceable only against Playboy that operators (who have a financial incentive to minimize subscriber requests for blocking devices) notify customers at regular (though unspecified) intervals, and via a variety of means, of the problem of signal bleed, the availability of blocking devices at no charge, and even the means-"a telephone call" to the cable operator, App., infra, 37a-by which a subscriber could obtain the devices. Indeed, the court held such a scheme to be a "viable" alternative to Section 505 notwithstanding the fact that there was literally no evidence in the record that such a scheme would work to provide genuinely adequate notice and a genuinely free choice. The only evidence that was in the record on this point surely did not support the viability of the court's scheme, for it consisted of the meager one-half of one percent rate of requests for blocking devices (albeit without the detailed notice and other requirements fashioned by the district court).
Pacifica upheld a time-channeling regulation of broadcast indecency that was more restrictive than the Section 505 scheme. It did not offer broadcasters the alternative of blocking rather than time-channeling,5 and it directly regulated a desired communication, rather than, as here, regulating a byproduct (signal bleed) of a communication between other parties in which the receiving nonsubscriber has no legitimate interest. Indeed, because the interest in protection of children in this case is greater than that in Pacifica, it would support stronger measures. Unlike the one-time broadcast of inappropriate language at issue in Pacifica, this case involves channels that carry "virtually 100% sexually explicit adult programming," App., infra, 42a, 47a, and which result, due to signal bleed, in "an unbroken continuum of sexually explicit sounds and images, delivered without invitation to [children's] home[s]." Id. at 73a. Had the district court taken Pacifica and its rationale into account, it would have upheld Section 505 because Section 505 imposes a very limited restriction on speech and is a very effective approach to the substantial evil it addresses. The court's application instead of a very rigorous, least-restrictive-alternative test is consistent only with a form of scrutiny far more demanding than that which this Court has applied to indecency on the broadcast media. Because indecency on cable television is constitutionally indistinguishable from indecency on those media, the district court's use of that standard of review was erroneous.
B. The district court also erred in concluding, even under the exceptionally strict standard of review it applied in this case, that Section 504 would be less restrictive than Section 505 or that Section 504 would be sufficient to promote the interests underlying Section 505.
1. The court's analysis of the restrictions imposed by Section 505 was based on its finding that "time channeling has proven to be the method of compliance of choice among" cable operators, because "no other system-wide blocking technique is economically feasible," App., infra, 33a & n.23. See also id. at 16a-17a. In turn, the court reasoned, such time channeling "amounts to the removal of all sexually explicit programming at issue during two thirds of the broadcast day from all households on a cable system." Id. at 33a. Time channeling thus "diminishes Playboy's opportunities to convey, and the opportunity of Playboy's viewers to receive, protected speech." Ibid.6
Based on the court's own factual findings, it is highly likely that an application of the court's hypothetical, enhanced version of Section 504 would have at least the same effects. The court found that "the distribution of lockboxes to a sufficient number of customers to effectively control the problem of signal bleed is not economically feasible." App., infra, 21a. Specifically, the court found that, "[i]f one considers a five year revenue stream in the break-even analysis, the number of traps that could be distributed rises to 6.0 percent of the subscriber base." Id. at 22a. In other words, if six percent of a system's subscribers opted to block signal bleed under an enhanced version of Section 504, then the costs of supplying the traps would equal the operator's expected profit from carrying sexually explicit channels. Of course, cable operators could be expected to cease carrying sexually explicit channels long before they reached that break-even point. As the court found, "profit-maximizing cable operators would cease carriage of adult channels * * * if costs rose to such a point that the profit from adult channels was less than the profit from channels unlikely to require blocking." Ibid.
Those findings make clear that any scheme that resulted in requests for traps from even quite a small number of customers-fewer than six percent and perhaps as low as one to three percent-would make it uneconomical for cable operators to carry sexually explicit channels. The district court's enhanced version of Section 504 would, under its own rationale, be such a scheme. The district court designed its enhanced version of Section 504 to provide genuine, easily understandable notice to each subscriber of the problem of signal bleed and a quick and easy means to stop it. App., infra, 36a-37a. Moreover, such notice would have to be repeated on a regular basis (though the district court did not specify how often), and special notice would have to be given whenever a cable operator changed the channel on which a sexually explicit programming service was carried. Id. at 37a. If such a system of notice and easily available blocking were in fact put into effect, the number of subscribers requesting blocking could be expected to exceed the minimal number necessary to make carriage of the sexually explicit channels uneconomical.
The result is that even a much enhanced version of Section 504 would likely lead to at least the same restriction of speech as does Section 505. Indeed, because time-channeling is not a part of the enhanced Section 504 scheme as envisioned by the district court, operators would simply cease to offer Playboy's sexually explicit programming services. On the other hand, if time-channeling too were offered to cable operators as a part of the hypothetical enhanced Section 504 package, then the operators would surely choose that option, for precisely the same economic reasons as they have chosen time channeling to comply with Section 505. Accordingly, the district court's enhanced version of Section 504 would be at least as restrictive of speech as Section 505, and it therefore is not a "less restrictive alternative." At the very least, the proposition that a fully effective notice requirement of the sort the district court posited would not result in time channeling to a comparable extent has not been demonstrated with the clarity necessary to invalidate an Act of Congress on least-restrictive-means grounds.
2. The district court's hypothetical, enhanced version of Section 504 would not in any event be a satisfactory alternative to Section 505, because it would not adequately protect the compelling interests that the district court itself recognized supported Section 505. Those interests are:
1) the Government's interest in the well-being of the nation's youth-the need to protect children from exposure to patently offensive sex-related material; 2) the Government's interest in supporting parental claims of authority in their own household-the need to protect parents' right to inculcate morals and beliefs [i]n their children; and 3) the Government's interest in ensuring the individual's right to be left alone in the privacy of his or her home-the need to protect households from unwanted communications.
App., infra, 26a-27a. See id. at 32a (concluding, after discussing each of the above interests, "that § 505 addresses three interests which in sum can be labeled 'compelling'").7
This Court has carefully distinguished between the first and second of those interests in the past, referring in Reno v. ACLU, both to "the State's independent interest in the well-being of its youth," as well as "the principle that 'the parents' claim to authority in their own household to direct the rearing of their chidren is basic in the structure of our society.'" 521 U.S. at 865 (emphasis added) (quoting Ginsberg v. New York, 390 U.S. 629, 639 (1968)). Our society has long recognized the authority of parents to decide how to raise their children. See Prince v. Massachusetts, 321 U.S. 158, 166 (1944). But it has also long been recognized that society itself has an interest in the upbringing of youth, especially where parents, as a result of inertia or indifference or the competing claims of other responsibilities, fail to exercise their own authority.
In determining whether its hypothetical, enhanced version of Section 504 would provide a less restrictive alternative to Section 505, the court entirely ignored society's independent interest in seeing to it that children are not exposed to sexually explicit materials. The district court stated:
[W]ith adequate notice of the issue of signal bleed, parents can decide for themselves whether it is a problem. Thus to any parent for whom signal bleed is a concern, § 504, along with 'adequate notice,' is an effective solution. In reality, § 504 would appear to be as effective as § 505 for those concerned about signal bleed, while clearly less restrictive of First Amendment rights.
App., infra, 37a-38a. We assume for purposes of discussion here that the court was correct in concluding that its enhanced version of Section 504 would be sufficient to inform parents of the problem of signal bleed and to permit them to eliminate it easily and effectively. In that event, such a regulation would arguably serve two of the interests identified by the district court-the interests in "protect[ing] parents' right to inculcate morals and beliefs [i]n their children" and "ensuring the individual's right to be left alone in the privacy of his or her home." Id. at 26a. Under such an enhanced version of Section 504, parents who had strong feelings about the matter could certainly see to it that their children did not view signal bleed-at least in their own homes.
The district court's enhanced version of Section 504 would not, however, serve society's independent interest in protecting minors from exposure to indecent, sexually explicit materials, and the district court's reasoning takes no account of that interest. Even an enhanced version of Section 504 would succeed in blocking signal bleed only if parents affirmatively decided to avail themselves of the means offered them to do so. There would certainly be parents- perhaps a large number of parents-who out of inertia, indifference, or distraction, simply would take no action to block signal bleed, even if fully informed of the problem and even if offered a relatively easy solution.8 There also are children who would view signal bleed at the homes of friends whose parents do not act (for whatever reason) under an enhanced Section 504 to block signal bleed. See App., infra, 52a, 80a. Society has an interest independent of the choices made by parents in seeing to it that children are not exposed to sexually explicit materials. Section 505 protects that interest, by ensuring that children are not exposed to signal bleed as a result of inertia, indifference, or distraction; reliance on Section 504 alone, by contrast, would disserve that interest, since children would be exposed to signal bleed of sexually explicit materials if parents did not take affirmative steps to obtain blocking.
We are not referring here to that presumably very small number of children whose parents affirmatively want their children to have the opportunity to watch sexually explicit programming. Even if we assume, arguendo, that the interests of those parents should prevail over the interests of society in protecting children from indecent material (cf. Reno v. ACLU, 521 U.S. at 878 (reserving that question)), such parents' interests would be protected equally well either by Section 505 (under which they would obtain access to sexually explicit channels by subscribing to it9) or by a hypothetical enhanced Section 504 (under which they would automatically receive the signal bleed). The children of parents who fail to act as a result of inertia, indifference, or distraction, however, would be protected only by Section 505. The district court gave no weight whatsoever to society's interest in protecting those children when it ruled that a hypothetical enhanced version of Section 504 would be an adequate alternative to Section 505. Accordingly, the district court's conclusion that such a version of Section 504 would be a less restrictive alternative to Section 505 is mistaken, and its judgment that Section 505 is unconstitutional should be reversed for that reason as well.
C. The district court's dismissal of the government's post-trial motions also was mistaken. The first notice of appeal, filed within the 20-day period prescribed by Section 561(b) of the Act but after the post-trial motions were filed, was effective to challenge the court's final judgment (as it would not have been if Rule 4(a)(4) of the Federal Rules of Appellate Procedure applied), but it did not deprive the district court of jurisdiction to consider the government's motions relating to the terms of that judgment.
1. In an appeal to a court of appeals, the filing of a timely motion to alter or amend the judgment under Federal Rule of Civil Procedure 59(e) or the filing (not more than 10 days after entry of judgment) of a motion for relief under Federal Rule of Civil Procedure 60(b) tolls the time within which the notice of appeal must be filed. Fed. R. App. P. 4(a)(4)(A)(iv) and (vi). A notice of appeal filed before disposition of such a motion becomes effective only when the order disposing of the last such motion is entered. Fed. R. App. P. 4(a)(4)(B)(i). The reason for this rule is that when such a motion is filed, "the case lacks finality." 11 Charles Alan Wright et al., Federal Practice and Procedure § 2821, at 220 (2d ed. 1995).
This Court's rule governing certiorari (Sup. Ct. R. 13.3) is similar to Rule 4(a)(4) in that it provides for tolling of the time for filing a certiorari petition while a petition for rehearing is pending in the court of appeals, but the Court's rule governing appeals (Sup. Ct. R. 18) does not address the consequences of filing a Rule 59(e) or 60(a) motion in the district court. The time limits for filing a notice of appeal in such a case are "not free from doubt * * * because Rule 18.1 does not contain the statement, in former appeal Rule 11.3 (and in current certiorari Rule 13.4), that 'if a petition for rehearing is timely filed by any party in the case, the time for filing the notice of appeal for all parties * * * runs from the date of the denial of rehearing or the entry of a subsequent judgment.'" Robert L. Stern et al, Supreme Court Practice § 7.2(c) at 388 (7th ed. 1993). See also ibid. (noting that it is "most unlikely" that this Court meant to abandon that rule sub silentio). Based on simple caution in this uncertain area of the law, we therefore decided to file a notice of appeal within 20 days of entry of the injunction.10
2. Our filing of the first notice of appeal while the two post-trial motions were pending before the district court did not deprive the district court of jurisdiction to consider those motions. To begin with, Rule 60(a) itself permits a district court to correct clerical mistakes in a judgment while an appeal is pending: "During the pendency of an appeal, such mistakes may be so corrected before the appeal is docketed in the appellate court, and thereafter while the appeal is pending may be so corrected with leave of the appellate court." On March 18, 1999, when the district court dismissed the Rule 60(a) motion for lack of jurisdiction, this appeal had not yet been docketed in this Court. Accordingly, the district court had jurisdiction to correct the mistake "just as if the case were still pending in the district court." 11 Charles Alan Wright et al., Federal Practice and Procedure, supra, § 2856, at 251.
The filing of the notice of appeal also did not divest the district court of jurisdiction to rule on the Rule 59(e) motion that was already pending when the notice of appeal was filed. This Court's Rule 18.1, which governs the commencement of appeals to this Court, is comparable to Rule 4 of the Federal Rules of Appellate Procedure, as it existed before 1979. Interpreting the pre-1979 Rule 4, this Court explained in Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58-59 (1982) (per curiam), that while a district court lacked jurisdiction to entertain a Rule 59(e) motion after a notice of appeal had been filed, "if the timing was reversed-if the notice of appeal was filed after the motion to vacate, alter, or amend the judgment- * * * the district court retained jurisdiction to decide the motion, but the notice of appeal was nonetheless considered adequate for purposes of beginning the appeals process." The reason this "theoretical inconsistency" was permitted under the pre-1979 rule was that there was little danger that a court of appeals and a district court would be acting simultaneously on the same judgment since a district court at that time did not automatically notify the court of appeals that a notice of appeal had been filed. Id. at 59.11
A direct appeal to this Court under Rule 18.1 functions similarly. After the notice of appeal is filed, the appellant is given 60 days within which to file its jurisdictional statement. Until the matter is docketed in this Court, there is no chance that the district court would be acting on a judgment at the same time as this Court. Because the jurisdictional statement in this case had not been filed at the time the district court dismissed the Rule 59(e) motion, that dismissal was improper and should be reversed.12
3. The question whether the government's notice of appeal divested the district court of jurisdiction is of substantial significance to the government and to other litigants in cases in which there is a right of direct appeal to this Court. The parties in such cases often must determine how to preserve both their right to appeal and their ability to seek postjudgment relief from the district court, which may alter the nature of the appeal to this Court or even render such an appeal unnecessary. Under the district court's ruling in this case, a litigant who wants to file a postjudgment motion may do so only at the risk of forfeiting the litigant's right to appeal. Plenary consideration of the district court's ruling by this Court would advance the interests of litigants, the district courts, and this Court in orderly litigation of cases involving direct appeals to this Court.
CONCLUSION
This Court should note probable jurisdiction.
Respectfully submitted.
CHRISTOPHER J. WRIGHT
General Counsel
Federal Communications
Commission
SETH P. WAXMAN
Solicitor General
WILLIAM B. SCHULTZ
Acting Assistant Attorney
General
EDWIN S. KNEEDLER
Deputy Solicitor General
JAMES A. FELDMAN
Assistant to the Solicitor
General
JACOB M. LEWIS
EDWARD HIMMELFARB
Attorneys
APRIL 1999
1 The videotape shows a scene in which a man performs oral sex on a woman. The video images, while scrambled, are discernible. The entirely audible audio portion contains four-letter words and vulgar references to sexual organs. DX 1.
2 It appears that Playboy has recently purchased Spice, which did not participate in the proceedings on remand from this Court and is no longer a party to this case. Chicago Tribune, Mar. 16, 1999, 1999 WL 2853823.
3 Judge Farnan had entered a temporary restraining order on March 7, 1996, at the outset of this case, which remained in effect until this Court summarily affirmed the district court's denial of a preliminary injunction. 918 F. Supp. 813 (D. Del. 1996); see App., infra, 2a, 19a.
4 This period began on March 9, 1996, when the Telecommunications Act went into effect, and ended on May 18, 1997, when Section 505 was implemented after the denial of a preliminary injunction was affirmed by this Court. App., infra, 19a.
5 Although the district court found that cable operators "with incomplete scrambling technology" choose time-channeling, App., infra, 33a n.23, an increasing number of cable systems use digital or other technologies that eliminate signal bleed entirely. See id. at 9a, 18a n.17. With respect to subscribers to sexually explicit programming services on such systems, Section 505 imposes no restriction on speech whatever. Quite aside from the arguments in text, the district court had no basis for enjoining the application of Section 505 to such systems.
6 We do not dispute that time-channeling of indecent sexually explicit television programming to the hours when most viewers want to see such programming is a restriction on such programming. The district court, however, failed to take into account the rather modest scope of that restriction-especially in light of the easy availability of VCR machines to tape television programming and play it at a time that is convenient to the viewer. Cf. Pacifica, 438 U.S. at 750 & n.28.
7 Although the district court ultimately accepted that sufficient evidence had been introduced to establish each of the interests, it noted that it was "troubled by the absence of evidence of harm presented both before Congress and before [the court] that the viewing of signal bleed of sexually explicit programming causes harm to children." App., infra, 30a. The district court's concern was misplaced. The government need not introduce empirical evidence in each case that minors are harmed by exposure to indecent, sexually explicit material. Concerns about minors' exposure to such material are based on commonly held moral views about the upbringing of children as well as empirical, scientific evidence. This Court has repeatedly held, over a period of many years and without referring to specific sociological or psychological data demonstrating harm, that society has a compelling interest in protecting children from exposure to indecent, sexually explicit materials. See, e.g., Reno v. ACLU, 521 U.S. at 869 ("'[T]here is a compelling interest in protecting the physical and psychological well-being of minors' which extend[s] to shielding them from indecent messages that are not obscene by adult standards.") (quoting Sable, 492 U.S. at 126); Bethel Sch. Dist. No. 403 v. Fraser, 478 U.S. 675, 683-684 (1986); New York v. Ferber, 458 U.S. 747, 756-757 (1982); Ginsberg v. New York, 390 U.S. 629, 640-642 (1968). In the Denver Area case, the Court's unanimity on this point was particularly striking. See 518 U.S. at 743 (plurality opinion) ("[T]he provision before us comes accompanied with an extremely important justification, one that this Court has often found compelling-the need to protect children from exposure to patently offensive sex-related material."); id. at 779 (O'Connor, J., concurring in part and dissenting in part) (Regulations at issue "serve an important governmental interest: the well-established compelling interest of protecting children from exposure to indecent material."); id. at 806 (Kennedy, J., concurring in part, concurring in the judgment in part, and dissenting in part) ("Congress does have * * * a compelling interest in protecting children from indecent speech."); id. at 832 (Thomas, J., concurring in the judgment in part and dissenting in part) ("Congress has a 'compelling interest in protecting the physical and psychological well-being of minors' and * * * its interest 'extends to shielding minors from the influence of [indecent speech] that is not obscene by adult standards.").
8 Studies have confirmed that sales of a good or service will be higher if consumers are required to take action to refuse it than if a mere failure to act is a refusal of the good or service. For example, telephone companies offering an "optional maintenance plan" for wires inside the subcriber's residence achieved a median subscription rate of 44% among 50 positive option offers (the subscriber must affirmatively request the plan) and a median rate of 80.5% among 22 unilateral negative option offers. Similarly, Canadian cable programmers have reported that such "negative option" offers for new channels resulted in 60%-70% subscription rates, far higher than the 25% rates resulting from standard (positive option) marketing methods. See Dennis D. Lamont, Negative Option Offers in Consumer Service Contracts: A Principled Reconciliation of Commerce and Consumer Protection, 42 UCLA L. Rev. 1315, 1330-1332 (1995). See also In re Columbia Broadcasting System, Inc., 72 F.T.C. 27, 337-338 (1967) (FTC action against record club) ("In practice, the Club's officials anticipate in advance that approximately 35% of the members of its largest ('popular') division will not return the card and hence will receive and accept the record selected for them by the Club."). Indeed, precisely because negative option sales give an unfair advantage to the provider of a good or service, Congress expressly prohibited cable operators from using negative option billing. See 47 U.S.C. 543(f) ("A cable operator shall not charge a subscriber for any service or equipment that the subscriber has not affirmatively requested by name," and the subscriber's "failure to refuse a cable operator's proposal to provide such service or equipment shall not be deemed to be an affirmative request for such service or equipment."); 47 C.F.R. 76.981 (FCC regulation prohibiting negative option billing). See also 16 C.F.R. 425.1 (FTC regulation regarding negative option plans).
9 We leave out of the analysis altogether those parents or other individuals who want signal bleed because they would like to receive sexually explicit materials broadcast by Playboy but do not want to pay for it. Such individuals have no cognizable interest in receiving signal bleed of a channel to which they do not subscribe.
10 In FCC v. League of Women Voters, 468 U.S. 364, 373 n.10 (1984), the Court held that under former Rule 11.3, a direct appeal taken during the pendency of a Rule 59 motion was permissible since the motion did not seek alteration of the rights adjudicated in the original judgment. See FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 212 (1952) ("The test is a practical one. The question is whether the lower court, in its second order, has disturbed or revised legal rights and obligations which, by its prior judgment, had been plainly and properly settled with finality."). In this case, the post-trial motions arguably did not seek to alter the rights adjudicated. The Rule 59(e) motion here asked the district court to limit the injunction to Playboy and thus would not have affected Playboy's rights. The Rule 60(a) motion asked the district court to include in its injunction what the court in its underlying decision announced it was requiring-that Playboy must ensure in its contractual arrangements that cable operators provide "adequate notice" of the availability of free lockboxes.
11 As the Court explained in Griggs, the 1979 amendments to Rule 4 altered the situation by making it clear that the court of appeals had no jurisdiction so long as a motion to vacate, alter, or amend the judgment was pending in the district court. 459 U.S. at 59-60. This in turn created a trap for the would-be appellant who failed to file a second notice of appeal after the disposition of the post-trial motion. Accordingly, Rule 4 was modified again in 1993 to provide that a notice of appeal filed after judgment but before the disposition of a posttrial motion "becomes effective to appeal a judgment or order * * * when the order disposing of the last such remaining motion is entered." Fed. R. App. P. 4(a)(4)(B)(i).
12 Alternatively, if the filing of the Rule 59(e) motion tolled the time to file the first notice of appeal under both Section 561(b) of the Act and 28 U.S.C. 1253, and if it is concluded that the Rule 59(e) motion "actually seeks an 'alteration of the rights adjudicated' in the court's first judgment," FCC v. League of Women Voters, 468 U.S. at 373 n.10 (quoting Department of Banking v. Pink, 317 U.S. 264, 266 (1942)), then the first notice of appeal may have been ineffective, at least insofar as the government sought to challenge the injunction as a final judgment. An ineffective notice of appeal would not divest the district court of jurisdiction. In that event, it should be noted that the second notice of appeal would remain sufficient to bring this case properly before this Court.
