2 Cases - BUS LAW - Brief Case
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6.1.docx
Supreme Court of the United States, ___ U.S. ___, 129 S.Ct. 1800, 173 L.Ed.2d 738 (2009).
www.supremecourt.gov/opinions/opinions.aspxa
IN THE LANGUAGE OF THE COURT
Justice SCALIA delivered the opinion of the Court.
**** The Communications
Act of 1934 established a system of limited-term broadcast licenses sub- ject to various “conditions” * * * .
* * * [These conditions include] the indecency ban—the statutory proscription [prohibition] against “utter[ing] any obscene, indecent,
or profane language by means of radio communication”—which Congress has instructed the [Federal Communications] Commission to enforce * * * .
* * * *
The Commission first invoked the statutory ban on indecent broad- casts in 1975, declaring a daytime broadcast of George Carlin’s “Filthy Words” monologue actionably inde- cent. At that time, the Commission announced the definition of inde- cent speech that it uses to this day, prohibiting “language that describes, in terms patently offensive as mea- sured by contemporary community standards for the broadcast medium, sexual or excretory activities or organs, at times of the day when there is a reasonable risk that chil- dren may be in the audience.”
****
Over a decade later, the Commission emphasized that the “full context” in which particular materials appear is “critically impor- tant,” but that a few “principal” factors guide the inquiry, such as the “explicitness or graphic nature” of the material, the extent to which the material “dwells on or repeats” the offensive material, and the extent to which the material was presented to “pander,” to “titillate,” or to “shock.” * * * “Where sexual or excretory references have been made once or have been passing or fleeting in nature, this characteristic has tended to weigh against a finding of indecency.”
In 2004, the Commission took one step further by declaring for the first time that a nonliteral (exple- tive) use of the F- and S-Words could be actionably indecent, even when the word is used only once. The first order to this effect dealt with an NBC broadcast of the Golden Globe Awards, in which the performer Bono [lead singer of the rock group U-2] commented, “This is really, really, f***ing brilliant.”
****
The order acknowledged that “prior Commission and staff action have indicated that isolated or fleet- ing broadcasts of the ‘F-Word’ * * * are not indecent or would not be acted upon.” It explicitly ruled that
“any such interpretation is no longer good law.”
[The present case] concerns utter- ances in two live broadcasts aired by Fox Television Stations, Inc., * * * prior to the Commission’s Golden Globes Order. The first occurred dur- ing the 2002 Billboard Music Awards, when the singer Cher exclaimed, “I’ve also had critics for the last 40 years saying that I was on my way out every year. Right. So f*** ‘em.” The second involved a segment of the 2003 Billboard Music Awards, [when Nicole Richie asked] the audi- ence, “Why do they even call it ‘The Simple Life?’ Have you ever tried to get cow s*** out of a Prada purse? It’s not so f***ing simple.”
On March 15, 2006, the Commission released Notices of Apparent Liability for a number of broadcasts that the Commission deemed actionably indecent, includ- ing the two described above.
* * * *
* * * In the Commission’s view, “granting an automatic exemption for ‘isolated or fleeting’ expletives unfairly forces viewers (including children)” to take “the first blow” and would allow broadcasters “to
air expletives at all hours of a day so long as they did so one at a time.”
Fox [appealed] to the Second Circuit [Court of Appeals] for review ofthe[order]* * *.TheCourtof
a. Under the heading “2008 Term,” select “2008 Term Opinions of the Court.” When the page opens, scroll down the list to “49” in the left-hand column and click on the case title to access the opinion. The Supreme Court of the United States maintains this Web site.
Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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EXTENDED CASE 6.1 CONTINUED P Appeals reversed the agency’s order,
finding the Commission’s reasoning inadequate under the Administrative
or policy are no longer dispositive [a deciding factor]” as well as “why the new rule effectuates the statute as well as or better than the old rule.” The Court of Appeals for the District of Columbia Circuit has similarly indicated that a court’s standard of review is “heightened somewhat” when an agency reverses course.
We find no basis in the Administrative Procedure Act or in our opinions for a requirement that all agency change be subjected to more searching review. The Act mentions no such heightened standard. [Emphasis added.]
To be sure, the requirement that an agency provide reasoned explana- tion for its action would ordinarily demand that it display awareness that it is changing position. An agency may not, for example, depart from a prior policy sub silentio [under silence, without any notice of the change] or simply disregard rules that are still on the books. And of course the agency must show that there are good reasons for the new policy. But it need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is per- missible under the statute, that there are good reasons for it, and that the agency believes it to be better.
* * * *
Judged under the above- described standards, the Commission’s new enforcement policy and its order finding the broadcasts actionably indecent were neither arbitrary nor capricious. First, the Commission forthrightly acknowledged that its recent actions have broken new ground, tak-
ing account of inconsistent “prior Commission and staff action” and explicitly disavowing them as “no longer good law.” * * * There is no doubt that the Commission knew it was making a change. That is why it declined to assess penalties * * * .
Moreover, the agency’s reasons for expanding the scope of its enforcement activity were entirely rational. It was certainly reasonable to determine that it made no sense to distinguish between literal and nonliteral uses of offensive words, requiring repetitive use to render only the latter indecent. * * * It is surely rational (if not inescapable) to believe that a safe harbor for single words would “likely lead to more widespread use of the offensive language.”
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The judgment of the United States Court of Appeals for the Second Circuit is reversed, and the case is remanded for further proceed- ings consistent with this opinion.b
Procedure Act. * certiorari.
****
*
* We granted
The Administrative Procedure Act, which sets forth the full extent of judicial authority to review executive agency action for procedural cor- rectness, permits (insofar as relevant here) the setting aside of agency action that is “arbitrary” or “capri- cious.” Under what we have called this “narrow” standard of review, we insist that an agency “examine the relevant data and articulate a satisfactory explanation for its action.” We have made clear, however, that “a court is not to substitute its judgment for that of the agency,” and should “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” [Emphasis added.]
In overturning the Commission’s judgment, the Court of Appeals here relied in part on Circuit precedent requiring a more substantial explana- tion for agency action that changes prior policy. The Second Circuit
has interpreted the Administrative Procedure Act and our opinion in [a previous case] as requiring agencies to make clear “why the original rea- sons for adopting the [displaced] rule
b. On remand, the U.S. Court of Appeals for the Second Circuit ruled that the FCC’s indecency policies were unconstitutionally vague and violated the broadcast networks’ First Amendment rights. See Fox Television Stations, Inc. v. Federal Communications Commission, 613 F.3d 317 (2010).
1. Today, children are likely exposed to indecent language in various media far more often than they were in the 1970s, when the Federal Communications Commission first began to sanction indecent speech. Does this mean that we need more stringent—or less stringent—regulation of broadcasts? Explain.
2. Technological advances have made it easier for broadcasters to “bleep out” offending words in the programs that they air. Does this development support a more stringent—or less stringent—enforcement policy by the Federal Communications Commission? Explain.
Rulemaking
Today, the major function of an administrative agency is rulemaking—the formulation of new regulations, or rules. The APA defines a rule as “an agency statement of general or particular appli- cability and future effect designed to implement,
interpret, or prescribe law and policy.”6 Regulations are sometimes said to be legislative because, like statutes, they have a binding effect. Like those who violate statutes, violators of agency rules may be
6. 5 U.S.C. Section 551(4).
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124 UNIT TWO THE PUBLIC AND INTERNATIONAL ENVIRONMENT
punished. Because agency rules have such signifi- cant legal force, the APA established procedures for agencies to follow in creating rules. Many rules must be adopted using the APA’s notice-and-comment rule- making procedure.
Notice-and-comment rulemaking involves three basic steps: notice of the proposed rulemak- ing, a comment period, and the final rule. The APA recognizes some limited exceptions to these proce- dural requirements, but they are seldom invoked. If the required procedures are violated, the resulting rule may be invalid.
The impetus for rulemaking may come from vari- ous sources, including Congress, the agency itself, or private parties, who may petition an agency to begin a rulemaking (or repeal a rule). For example, environmental groups have petitioned for stricter air-pollution controls to combat emissions that may contribute to global warming.
NOTICE OF THE PROPOSED RULEMAKING When a federal agency decides to create a new rule, the agency publishes a notice of the proposed rule- making proceedings in the Federal Register, a daily publication of the executive branch that prints gov- ernment orders, rules, and regulations. The notice states where and when the proceedings will be held, the agency’s legal authority for making the rule (usu- ally its enabling legislation), and the terms or sub- ject matter of the proposed rule. The APA requires an agency to make available to the public certain information, such as the key scientific data under- lying the proposal. The proposed rule is also often reported by the news media and published in the trade journals of the industries that will be affected by the new rule.
COMMENT PERIOD After the publication of the notice of the proposed rulemaking proceedings, the agency must allow ample time for persons to comment in writing on the proposed rule. The comment period must be at least thirty days but is often sixty days or longer. An agency can extend the period to allow for more comments or shorten it in emergencies (such as when the Federal Aviation Administration changed airport security procedures after September 11, 2001).
The purpose of this comment period is to give interested parties the opportunity to express their views on the proposed rule in an effort to influ- ence agency policy. Anyone can submit com- ments. The comments may be in writing or, if a hearing is held, may be given orally. All comments
are logged in and become a public record that oth- ers can examine.
The agency need not respond to all comments, but it must respond to any significant comments that bear directly on the proposed rule. The agency responds by either modifying its final rule or explaining, in a statement accompanying the final rule, why it did not make any changes. In some circumstances, par- ticularly when the procedure being used in a specific instance is less formal, an agency may accept com- ments after the comment period is closed. The agency should summarize these ex parte (private, “off-the- record”) comments in the record for possible review.7
THE FINAL RULE After the agency reviews the com- ments, it drafts the final rule and publishes it in the Federal Register. The final rule must contain a “con- cise general statement of . . . basis and purpose” that describes the reasoning behind the rule.8 The final rule may modify the terms of the proposed rule in light of the public comments, but if substantial changes are made, a new proposal and a new oppor- tunity for comment are required. The final rule is later compiled along with the rules and regulations of other federal administrative agencies in the Code of Federal Regulations. Final rules have binding legal effect unless the courts later overturn them and for this reason are considered legislative rules. If an agency failed to follow proper rulemaking proce- dures when it issued the final rule, however, the rule may not be binding.
CASE IN POINT Members of the Hemp Industries Association (HIA) manufacture and sell food prod- ucts made from hemp seed and oil. These products contain only trace amounts of tetrahydrocannabi- nols (THC, a component of marijuana) and are nonpsychoactive—that is, they do not affect a person’s mind or behavior. In 2001, the U.S. Drug Enforcement Administration (DEA) published an interpretive rule declaring that “any product that contains any amount of THC is a Schedule I con- trolled substance [a drug whose availability is restricted by law].” Subsequently, without following formal rulemaking procedures, the DEA declared that two legislative rules relating to products contain- ing natural THC were final. These rules effectively
7. Ex parte is a Latin term meaning “from one party.” In the law, it usually refers to proceedings in which only one party to a dispute is present. Ex parte communications with judges (or administrative law judges) generally are prohibited. Thus, when agencies accept ex parte public comments, they must record them and make them available to others.
8. 5 U.S.C. Section 555(c).
Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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banned the possession and sale of the food products of the HIA’s members. The HIA petitioned for court review, arguing that the DEA rules should not have been enforced. A federal appellate court agreed and ruled in favor of the HIA. The DEA should have held hearings on the record concerning the rules, invited public comment, and then issued formal rulings on each finding, conclusion, and exception. Because the DEA did not follow its formal rulemaking proce- dures, the rules were not enforceable.9
Informal Agency Actions
Rather than take the time to conduct notice-and- comment rulemaking, agencies have increasingly been using more informal methods of policymak- ing, such as issuing interpretive rules and guidance documents. As mentioned previously, legislative rules are substantive in that they affect legal rights, whereas interpretive rules simply declare policy and do not affect legal rights or obligations. Agencies also issue various other materials, such as guidance documents, which advise the public on the agen- cies’ legal and policy positions.
Informal agency actions are exempt from the APA’s requirements because they do not establish legal rights—a party cannot be directly prosecuted for violating an interpretive rule or a guidance docu- ment. Nevertheless, an agency’s informal action can be of practical importance because it warns regu- lated entities that the agency may engage in formal rulemaking if they fail to heed the positions taken informally by the agency.
SECTION 4
JUDICIAL DEFERENCE TO AGENCY DECISIONS
When asked to review agency decisions, courts his- torically granted some deference (significant weight) to the agency’s judgment, often citing the agency’s great expertise in the subject area of the regulation. This deference seems especially appropriate when applied to an agency’s analysis of factual questions, but should it also extend to an agency’s interpreta- tion of its own legal authority? In Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,10 the United States Supreme Court held that it should,
9. Hemp Industries Association v. Drug Enforcement Administration, 357 F.3d 1012 (9th Cir. 2004).
10. 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).
thereby creating a standard of broadened deference to agencies on questions of legal interpretation.
The Holding of the Chevron Case
At issue in the Chevron case was whether the courts should defer to an agency’s interpretation of a stat- ute giving it authority to act. The Environmental Protection Agency (EPA) had interpreted the phrase “stationary source” in the Clean Air Act as referring to an entire manufacturing plant, and not to each facility within a plant. The agency’s interpretation enabled it to adopt the so-called bubble policy, which allowed companies to offset increases in emissions in part of a plant with decreases elsewhere in the plant—an interpretation that reduced the pollution- control compliance costs faced by manufacturers. An environmental group challenged the legality of the EPA’s interpretation.
The Supreme Court held that the courts should defer to an agency’s interpretation of law as well as fact. The Court found that the agency’s interpreta- tion of the statute was reasonable and upheld the bubble policy. The Court’s decision in the Chevron case created a new standard for courts to use when reviewing agency interpretations of law, which involves the following two questions:
1. Did Congress directly address the issue in dis- pute in the statute? If so, the statutory language prevails.
2. If the statute is silent or ambiguous, is the agen- cy’s interpretation “reasonable”? If it is, a court should uphold the agency’s interpretation even if the court would have interpreted the law differently.
When Courts Will Give Chevron Deference to Agency Interpretation
The notion that courts should defer to agencies on matters of law was controversial. Under the hold- ing of the Chevron case, when the meaning of a par- ticular statute’s language is unclear and an agency interprets it, the court must follow the agency’s interpretation as long as it is reasonable. This led to considerable discussion and litigation to test the boundaries of the Chevron holding. For instance, are courts required to give deference to all agency interpretations or only to those interpretations that result from adjudication or formal rulemaking pro- cedures? Are informal agency interpretations issued through opinion letters and internal memoranda also entitled to deference?
Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
126 UNIT TWO THE PUBLIC AND INTERNATIONAL ENVIRONMENT
11. United States v. Mead Corporation, 533 U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001).
In the case that follows, an environmental organi- zation brought an action challenging the U.S. Forest Service’s decision to issue a special use permit to a business that conducts helicopter-skiing operations in two national forests. As you will read in Chapter 25, the National Environmental Policy Act requires federal agencies to prepare an environmental impact statement (EIS) that considers every significant aspect of the environmental impact of a proposed action. Although the Forest Service prepared an EIS before issuing the use permit, environmental groups claimed that the EIS did not sufficiently analyze increasing recreational pressures in the forests. The groups sought to have the court invalidate the per- mit. Although the Chevron precedent is not specifi- cally mentioned, the court’s analysis illustrates the way in which courts review agency decisions.
