Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

تمرين 15

FACTS Federal law bans the broadcasting of ''any … indecent … language,'' which includes references to sexual or excretory activity or organs. Congress has given the Federal Communications Commission (FCC) various means of enforcing this indecency ban, including civil fines, license revocations, and the denial of license renewals. The Commission first invoked the statutory ban on indecent broadcasts in 1975, declaring a daytime broadcast of George Carlin's ''Filthy Words'' monologue actionably indecent. In the ensuing years, the Commission took a cautious, but gradually expanding, approach to enforcing the statutory prohibition against indecent broadcasts. Although the Commission had expanded its enforcement beyond the ''repetitive use of specific words or phrases,'' it preserved a distinction between literal and nonliteral (or ''expletive'') uses of evocative language. The Commission explained that each literal ''description or depiction of sexual or excretory functions must be examined in context to determine whether it is patently offensive,'' but that ''deliberate and repetitive use … is a requisite to a finding of indecency'' when a complaint focuses solely on the use of nonliteral expletives. In 2004, the FCC's Golden Globes Order declared for the first time that an expletive (nonliteral) use of the F-Word or the Sh-Word 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 commented, ''This is really, really, f***ing brilliant.''
This case concerns utterances in two live broadcasts aired by Fox Television Stations, Inc., and its affiliates prior to the Commission's Golden Globes Order. The first occurred during 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, during the presentation of an award by Nicole Richie and Paris Hilton, principals in a Fox television series called ''The Simple Life.'' Ms. Hilton began their interchange by reminding Ms. Richie to ''watch the bad language,'' but Ms. Richie proceeded to ask the audience, ''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.'' Following each of these broadcasts, the Commission received numerous complaints from parents whose children were exposed to the language.
In 2006, the FCC found both broadcasts to have violated the prohibition against indecency. The FCC's order stated that the Golden Globes Order eliminated any doubt that fleeting expletives could be actionable; declared that under the new policy, a lack of repetition weighs against a finding of indecency, but is not a safe harbor; and held that both broadcasts met the new test because one involved a literal description of excrement and both invoked the F-Word. The order did not impose sanctions for either broadcast. The Second Circuit set aside the agency action, declining to address the constitutionality of the FCC's action but finding the FCC's reasoning inadequate under the Administrative Procedure Act (APA).
DECISION The judgment of the U.S. Court of Appeals for the Second Circuit is reversed, and the case is remanded.
OPINION Scalia, J. The Administrative Procedure Act, [citation], which sets forth the full extent of judicial authority to review executive agency action for procedural correctness, [citation], permits (insofar as relevant here) the setting aside of agency action that is ''arbitrary'' or ''capricious,'' [citation]. 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.'' Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., [citation]. We have made clear, however, that ''a court is not to substitute its judgment for that of the agency,'' [citation], and should ''uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned,'' [citation].
In overturning the Commission's judgment, the Court of Appeals here relied in part on Circuit precedent requiring a more substantial explanation for agency action that changes prior policy. The Second Circuit has interpreted the Administrative Procedure Act and our opinion in State Farm as requiring agencies to make clear '''why the original reasons for adopting the [displaced] rule or policy are no longer dispositive''' as well as '''why the new rule effectuates the statute as well as or better than the old rule.''' [Citation.] ***
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 statute makes no distinction, however, between initial agency action and subsequent agency action undoing or revising that action.
To be sure, the requirement that an agency provide reasoned explanation 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 or simply disregard rules that are still on the books. [Citation.] 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 permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates. This means that the agency need not always provide a more detailed justification than what would suffice for a new policy created on a blank slate. Sometimes it must- when, for example, its new policy rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that must be taken into account. [Citation.] It would be arbitrary or capricious to ignore such matters. In such cases it is not that further justification is demanded by the mere fact of policy change; but that a reasoned explanation is needed for disregarding facts and circumstances that underlay or were engendered by the prior policy.
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, taking account of inconsistent ''prior Commission and staff action'' and explicitly disavowing them as ''no longer good law.'' [Citation.] *** 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. *** Even isolated utterances can be made in ''pander [ing,] … vulgar and shocking'' manners, [citation], and can constitute harmful '''first blow[s]''' to children, [citation]. 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,'' [Citation.]
***
The Second Circuit did not definitively rule on the constitutionality of the Commission's orders, but respondents nonetheless ask us to decide their validity under the First Amendment. This Court, however, is one of final review, ''not of first view.'' [Citation.] *** We see no reason to abandon our usual procedures in a rush to judgment without a lower court opinion. We decline to address the constitutional questions at this time.
INTERPRETATION For agency action to be upheld on review under the Administrative Procedure Act's ''arbitrary or capricious'' standard, the agency must have examined relevant data and articulated a satisfactory explanation for its action.
CRITICAL THINKING QUESTION What policies support limitations on judicial review of agency action? Were these policies implicated in this case?