Newsroom Law Blog : Media & Communications Lawyer & Attorney : Brooks Pierce Law Firm : Media Law, Libel Defense, FCC

January has been a prolific month on the U.S. Supreme Court docket for cases raising First Amendment or other media issues.  In addition to the Citizens United and Presley decisions addressing limits on corporate political speech and access to jury voir dire proceedings, the Supreme Court earlier this month agreed to hear a case out of the Ninth Circuit involving public access to the petitions that put in place a controversial Washington ballot initiative.  The petitions were sought under a state sunshine law in an effort to learn the identities of those who supported placing the initiative on the ballot.  The case therefore presents an interesting collision of the First Amendment rights to speak anonymously and to peaceably assemble and state sunshine laws.

We previously reported on the Doe v. Reed case, which the Supreme Court stayed while considering the petition for certiorari it ultimately granted this month.  The case relates to Referendum 71, a ballot initiative that appeared on the November 2009 ballot in the State of Washington and was intended as a vehicle for overturning a law, passed earlier in 2009 by the Washington legislature, that granted legal rights to domestic partners equivalent to those enjoyed by married couples.  The initiative passed with slightly above 53% of the vote, a result that upheld the law.

The dispute in Doe v. Reed involves the question of whether the signed petitions that ultimately allowed Referendum 71 to appear on the ballot constitute public records are subject to disclosure under Washington law as public records.  Nearly 138,000 names appear on these petitions.  The plaintiffs brought suit in federal court, contending that those who had requested the petitions had indicated they would publish the list of names on the Internet.  Making the list available under public records laws, according to the plaintiffs, threatened to chill the First Amendment activity of supporters of Referendum 71.  The plaintiffs assert that those who petitioned to include Referendum 71 on the November ballot would face harassment from opponents of the ballot measure if their names were made publicly available.

The district court issued a preliminary injunction barring release of the names, concluding that "supporting the referral of a referendum is protected political speech, which includes the component of the right to speak anonymously."  The Ninth Circuit reversed, holding that signing one of the petitions at issue does not constitute anonymous speech because the petitions are not created in a way that is designed to protect confidentiality.  It held further that the district court erred in applying strict scrutiny to Washington's sunshine law, and, when intermediate scrutiny is applied, the sunshine law passes muster because "each of the State’s asserted interests is sufficiently important to justify the PRA’s incidental limitations on referendum petition signers’ First Amendment freedoms."

The fact that the Supreme Court agreed to hear the case may signal that the Ninth Circuit ruling's days are numbered.  If that occurs, a sweeping decision affirming the right to speak anonymously would appear to be an important First Amendment victory.  However, the outcome here -- in which a third party has asserted a constitutional challenge to a sunshine law -- has troubling implications for those in the newsroom.  Reporters face enough trouble securing materials under state public records statutes without interference from third parties.  Reversal of the Ninth Circuit's decision may encourage court challenges to public records laws by third parties such as public employees or private entities contracting with or seeking money from public agencies.  We will watch closely for the outcome in this case, which is set to be argued in April.

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Yesterday, the United States Supreme Court ruled in Citizens United v. Federal Election Commission that corporations (and labor unions) may make unlimited expenditures to directly advocate for the election or defeat of a Federal candidate at any point in the election cycle.  The crux of the Court’s decision is that the First Amendment prohibits Congress from banning certain types of political speech based on the corporate identity of the speaker. The decision opens the way for greatly increased participation by corporations—large and small, for-profit and non-profit—in the election process.

Prior to yesterday’s decision, federal law, as amended by the Bipartisan Campaign Reform Act of 2002 (“BCRA,” informally referred to as the McCain-Feingold law), prohibited corporations and labor unions from purchasing ads that either expressly advocate the election or defeat of a Federal candidate or amount to an “electioneering communication”—that is, a communication that (1) “refers to a clearly identified candidate for Federal office,” (2) is made within 30 days of a primary election or within 60 days of a general election, and (3) is publicly distributed.  Since BCRA, corporations and labor unions have been permitted to engage in express advocacy and electioneering communications only through their political action committees (PACs).

The Supreme Court previously upheld the ban on corporate electioneering communications in 2003 in McConnell v. Federal Election Commission, relying on its holding in an earlier case, Austin v. Michigan Chamber of Commerce, that restrictions on corporate political speech are permissible in light of the Government’s interest in preventing “the corrosive and distorting effects of immense aggregations of wealth” by corporations.

In January 2008, Citizens United, a non-profit corporation, released a documentary entitled “Hillary: The Movie” about then-Senator Hillary Clinton, a candidate in the Democratic Party’s 2008 Presidential primary. Citizens United wished to make the documentary available through video-on-demand service within 30 days of the 2008 primary elections but feared that the film (and a series of three advertisements encouraging viewers to purchase the film through the on-demand service) would trigger the BCRA ban on electioneering communications because the film and ads “referred to” a Presidential candidate.  Citizens United sued in federal court seeking a declaration that the BCRA ban on electioneering communications is unconstitutional.  After a three-judge panel of the federal district court denied Citizens United’s requests for relief, Citizens United sought review in the Supreme Court.

The Supreme Court, in a 5-4 decision, yesterday held that “[t]he Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether.”  In so holding, the Court overruled Austin (which allowed the Government to restrict corporate political speech) and invalidated BCRA’s ban on electioneering communications.  Citizens United reflects the Court’s adherence to the principle that the Government cannot suppress political speech based on the speaker’s corporate identity.

Beginning with the premise that BCRA erects an outright ban on core political speech by corporations and unions, the Court applied “strict scrutiny” to the ban, requiring the Government to demonstrate that the law furthers a compelling interest.  The BCRA ban did not withstand that scrutiny: the Court found “no basis for the proposition that, in the context of political speech, the Government may impose restrictions on certain disfavored speakers,” including corporations.

The Court addressed and rejected all three “interests” proposed by the Government to support the electioneering communications ban: (1) the “anti-distortion” theory adopted by Austin, (2) an interest in preventing corruption, and (3) and an interest in protecting “dissenting shareholders.”

The Court first declared that First Amendment protections cannot turn on a speaker’s financial ability (that is, “immense aggregations” of corporate wealth) to engage in political speech.  On that point, the majority was particularly troubled by the prospect that the anti-distortion rationale for the BCRA ban could be used to prohibit political speech by media corporations, which are currently exempted from the ban on electioneering communications.  The Court likewise rejected the anti-corruption rationale because independent expenditures simply do not present the same risk of quid pro quo corruption (or the appearance of corruption) as do direct contributions to candidates and parties.  And it rejected the shareholder protection rationale—that shareholders should not be compelled to fund corporate political speech with which they disagree—as both underinclusive (because the statute only bans some corporate speech at certain times) and overinclusive (because it applies even to single-shareholder corporations).

The Court concluded that “the First Amendment does not permit Congress to make categorical distinctions based on the corporate identity of the speaker and the content of the political speech.”  With Austin thus set aside, the Court rejected the ban on corporate independent expenditures (for both electioneering communications and for express advocacy), because the law’s “purpose and effect are to silence entities whose voices the Government deems to be suspect.”  Given the primacy of political speech in our representative democracy, the Court said, “political speech must prevail against laws that would suppress it.”

The Court did not go so far as to strike down the BCRA disclaimer and disclosure requirements.  In the Court’s view, while more political speech enhances the political process, that speech should be transparent, so that the public can better evaluate the political message and the potential bias of the speaker.

The Citizens United decision is breathtaking in scope.

First, the content of political expenditures by corporations and unions is no longer at issue, because corporations and unions are no longer limited to engaging in so-called “issue advocacy.” Rather, they may now purchase advertising that includes a direct appeal to vote for or against a Federal candidate.  The distinction between “issue” and “express” advocacy by corporations and unions—which has muddled campaign finance law for so long—is dissolved.

Second, the timing of political expenditures by corporations and unions is no longer at issue.  After the Supreme Court held that corporate and union political expenditures are no longer limited to issue advocacy, it also struck down the BCRA prohibition on “electioneering communications”—and, with it, the 30- and 60-day windows that governed corporate political ads.  As a result, the Supreme Court’s test for distinguishing between permissible and prohibited electioneering communications articulated in 2007 in Federal Election Commission v. Wisconsin Right to Life is already a relic of campaign finance law.

Third, the number of entities that benefit from the decision is enormous.  The decision applies to all corporations and unions regardless of size or tax status.  This means that both traditional for-profit corporations and tax-exempt political organizations—e.g., Section 527 organizations such as Moveon.org and Club for Growth—may make unlimited political expenditures to expressly advocate for the election or defeat of a Federal candidate.

Fourth, the Court’s reasoning calls into question similar campaign finance laws enacted by nearly half the States.

Yesterday’s ruling does not, however, alter the longstanding bar on direct corporate contributions to federal political candidates. Corporations and unions continue to be prohibited from making contributions to federal candidates from their general treasuries.
 

*     *     *

The Citizens United decision has already generated a massive volume of commentary, some positive, some negative.  President Obama, for his part, has vowed to "develop a forceful response" to the decision, which he asserted gives "a green light to a new stampede of special interest money in our politics."  The U.S. Chamber of Commerce hailed the ruling, stating that it "protects the First Amendment rights of organizations across the political spectrum, and is a positive for the political process and free enterprise."

As the Court itself acknowledged, the decision undoubtedly ushers in a new era of campaign finance in America, namely pairing corporate independent expenditures with disclosure requirements.  It remains to be seen whether Congress will make a renewed effort to limit participation in the political process by corporations.

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The U.S. Supreme Court today issued a 7-2 per curiam opinion summarily reversing a Georgia Supreme Court decision that had found no error in a lower court ruling that emptied a courtroom during jury selection in a criminal case.  The case was notable in the short work the majority made of the notion that the Sixth Amendment right to a public trial somehow may not include the voir dire process or that applicable test is not clear.  The case therefore represents an important victory for access to court proceedings.

The case, Presley v. Georgia, involved a criminal trial in which a single person was present in the courtroom during the voir dire of potential jurors.  The presiding judge asked who the man was, and he answered he was the defendant's (Presley's) uncle.  The judge then instructed the man to leave while the jury was being picked, over the objection of the defendant's counsel, suggesting there "just isn't space for them to sit in the audience."  The judge made clear that the defendant's uncle could return "once the trial starts."  After Presley was convicted, he moved for a new trial based on the exclusion of his uncle, presenting evidence that there had been adequate room for members of the public to attend voir dire.  The trial court denied the motion, and, on appeal, the intermediate and highest courts of Georgia found no error.

The focus of the case was on whether the trial court was obligated to consider alternatives to closure despite the fact that Presley's counsel had not suggested any.

The Supreme Court began its discussion by reaffirming that the right to a public trial flows not just from the Sixth Amendment rights of the accused, but also from the free-speech protections of the First Amendment.  The Court then explained that in the Press Enterprise I case, it had held that the First Amendment requires access to voir dire.  Despite the fact that Presley was asserting a violation of his Sixth Amendment rights, the Court held "there is no legitimate reason, at least in the context of juror selection proceedings, to give one who asserts a First Amendment privilege greater rights to insist on public proceedings than the accused has."

The Court went on to acknowledge that under both the First and Sixth Amendments, there may be exceptions to the right to insist that voir dire be public; however, "such circumstances will be rare," and "the balance of interests must be struck with special care."  The test sets a high bar, in that the party seeking to close the proceedings must "advance an overriding interest that is likely to be prejudiced," "closure must be no broader than necessary," and the judge "must consider reasonable alternatives to closing the proceedings" and "make findings adequate to support closure." 

The Court brushed aside the suggestion from the Georgia Supreme Court that a court need not consider alternatives if the party opposing closure fails to suggest them.  The Court underscored that the teaching of Press Enterprise I was clear -- "the public has a right to be present whether or not any party has asserted the right."  Thus, "[t]rial courts are obligated to take every reasonable measure to accommodate public attendance at criminal trials."  In Presley, the Court explained, the trial judge not only failed to make any attempt to accommodate public attendance, it also failed to articulate an overriding interest in closure through specific findings.  There was no evidence in the record that the presence of the defendant's uncle in the courtroom gallery threatened the fairness of the trial or the impartiality of the potential jurors.

In dissent, Justices Thomas and Scalia complained that the majority summarily disposed of the case, without Presley even asking that they do so.  Justice Thomas, who wrote the dissenting opinion, went on to argue that there was some lingering question after Press Enterprise I and its progeny as to the Sixth Amendment right to public juror selection proceedings and therefore that the majority should not have ruled summarily.

Justice Thomas, a Georgia native, appears to have been motivated to dissent in part by a desire to defend jurists from his home state.  He closed his dissent by accusing the majority of "belittl[ing] the efforts of our judicial colleagues who have struggled with these issues in attempting to interpret and apply the same opinions upon which the Court so confidently relies today."  However, while he and Justice Scalia may have felt that Presley presented a close constitutional question, the other seven Justices clearly did not.  It is heartening to see a healthy majority of the Court act with dispatch to correct the failure of a state court to apply the clear holdings of Press Enterprise I and other courtroom access cases.  The Supreme Court deserves high marks for its summary treatment of the issues in Presley.

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With 2009 drawing to a close, a panel of the Fourth Circuit affirmed a decision by the Eastern District of Virginia holding that the website Consumeraffairs.com was an “interactive computer service” entitled to immunity under Section 230 of the Communications Decency Act with respect to 20 website postings concerning a class-action lawsuit against an auto dealer. The Fourth Circuit’s opinion in Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc. is linked here.

The Fourth Circuit panel’s majority opinion is largely procedural, but it offers an important lesson about how the court views Section 230 immunity. A plaintiff in the Fourth Circuit seeking to avoid a website defendant’s Section 230 immunity by characterizing the defendant as an “information content provider” at the motion to dismiss stage of litigation must provide more than conclusory statements and speculation to state a claim. 

Nemet did not dispute in its amended complaint that Consumeraffairs.com was an “interactive computer service” generally entitled to immunity under Section 230. Instead, Nemet alleged that the defendant was an “information content provider” subject to liability under Section 230 with respect to 20 complaints posted on the website.  The Fourth Circuit panel disagreed. The nut of the majority opinion is encapsulated in this quote:

[The Federal Rules of Civil Procedure] require[] “more than conclusions” to “unlock the doors of discovery for a plaintiff.” Viewed in the correct “factual context,” Nemet’s stark allegations are nothing more than a “formulaic recitation” of one of the elements of its claims. A plaintiff must offer more than “[t]hreadbare recitals of the elements of a cause of action” and “conclusory statements,” however, to show its entitlement to relief.

Section 230 defines an “information content provider” as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” Based on the governing precedent, the Fourth Circuit panel reviewed the Nemet case to determine “whether the facts pled by Nemet, as to the application of CDA immunity, make its claim that Consumeraffairs.com is an information content provider [subject to liability under Section 230] merely possible or whether Nemet has nudged the claim ‘across the line from conceivable to plausible.’”

In support of its claim for defamation and tortious interference with business expectancy, Nemet argued that Consumeraffairs.com was an “information content provider,” because of (1) the structure and design of the Consumeraffairs.com website or (2) Consumeraffairs.com’s participation in preparing the 20 complained of consumer complaints. Nemet argued that the defendant’s actions to solicit the consumer complaints, steer the complaints into specific categories, contact customers to obtain more information about their complaints, help draft or revise their complaints, and promise recovery by joining a class-action lawsuit rendered Consumeraffairs.com responsible, in whole or in part, for the creation or development of the posts. In other words, these actions moved Consumeraffairs.com into the “information content provider” category.

At first blush, it would seem that Nemet had a plausible argument. But, reviewing Nemet’s amended complaint, the majority found the plaintiff did not allege sufficient facts to demonstrate the defendant’s status as an “information content provider.” The majority wrote, “[e]ven accepting as true all of the facts Nemet has pled as to Consumeraffairs.com’s liability for the structure and design of its website, the amended complaint ‘does not show, or even intimate,’ that Consumeraffairs.com contributed to the allegedly fraudulent nature of the comments at issue.”

The majority distinguished this case from the FHC v. Roommates.com case, in which the Ninth Circuit held Roommates.com liable as the developer of unlawful website content because Roommates.com required users to disclose their sex, family status, and sexual orientation, as well as those of the users’ desired roommates, using a list of pre-determined responses. According to the Fourth Circuit, “the Ninth Circuit did not hold that a website operator becomes an information content provider because the information posted on its website may be developed in a way unrelated to its initial posting, such as its potential to further a class-action lawsuit. Roommates.com merely adopted a definition of 'development,' for purposes of § 230(f)(3), that includes 'materially contributing' to a given piece of information’s alleged unlawfulness.”

The Fourth Circuit also rejected Nemet’s argument that Consumeraffairs.com became an “information content provider” by asking questions about consumer complaints against Nemet or by helping consumers draft or revise their complaints. With respect to drafting or revising complaints, the majority noted that the Fourth Circuit’s standards required Nemet to allege action “more than a website operator performs as part of its traditional editorial function” to render it an “information content provider.”

Finally, the panel majority rejected Nemet’s claim that Consumeraffairs.com fabricated eight of the 20 website posts. If the defendant made up these complaints, then, presumably, the court would have to find Consumeraffairs.com the creator of—and, therefore, “information content provider” of—the fabricated content. Nemet’s primary evidence of the fabrication was the fact that its own internal dealership records did not match the dates, car models, and first names associated with these eight complaints. The majority found this allegation to be “pure speculation and a conclusory allegation of an element of the [Section 230] immunity claim. . . .” (Chief District Judge Jones dissented from the majority on this issue, writing that the majority held Nemet to too high a pleading standard for these eight complaints.)

Thus, Nemet stands for the proposition that to make it past the initial pleadings stage, a plaintiff must allege facts and offer more than mere conclusory statements and speculative inferences about how a defendant qualifies as the developer or creator of website content. 

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Broadcasting & Cable is reporting that the Third Circuit has scheduled oral argument in the Janet Jackson "wardrobe malfunction" case for February 23, 2010, at 1:30 p.m. 

The case involves review of the FCC's determination that the Super Bowl half-time broadcast of less than one second of Janet Jackson's bare breast was actionably indecent.  In July 2008, the Third Circuit vacated and remanded the FCC's decision, finding that the Commission's action was arbitrary and capricious because the material at issue was "fleeting" and, at the time of the broadcast, the FCC's policy was not to sanction the broadcast of "fleeting nudity."  The FCC appealed the Third Circuit's decision to the U.S. Supreme Court.

However, the Second Circuit's "fleeting expletive" case made it to the Supreme Court before the Third Circuit's case and, as reported earlier, the Supreme Court in Fox v. FCC upheld the FCC's decision in that case on procedural grounds.  But the Supreme Court remanded the Fox case to the Second Circuit to determine whether the FCC can regulate "fleeting expletives" without violating the free-speech protections of the First Amendment. 

Shortly after the Supreme Court issued its Fox opinion, it vacated the Third Circuit's Janet Jackson decision and remanded the case for further consideration in light of Fox.  Just as the oral argument scheduled before the Second Circuit on January 13 in Fox, the Third Circuit oral argument on February 23 is expected to explore whether the FCC's "fleeting nudity" indecency policy can survive First Amendment scrutiny.

We will keep you informed of developments in these two important cases.

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