Source: https://www.legalcrystal.com/case/98906/fcc-vs-american-broadcasting-co-inc
Timestamp: 2018-02-21 15:43:20
Document Index: 608312930

Matched Legal Cases: ['§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1253', '§ 1304', '§ 316', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 4', '§ 303', '§ 307', '§ 309', '§ 312', '§ 154', '§ 303', '§ 307', '§ 309', '§ 312']

Fcc Vs American Broadcasting Co Inc - Citation 98906 - Court Judgment | LegalCrystal
Fcc Vs. American Broadcasting Co., Inc. - Court Judgment
LegalCrystal Citation legalcrystal.com/98906
Case Number 347 U.S. 284
Respondent American Broadcasting Co., Inc.
fcc v. american broadcasting co., inc. - 347 u.s. 284 (1954) u.s. supreme court fcc v. american broadcasting co., inc., 347 u.s. 284 (1954) federal communications commission v. american broadcasting co., inc. argued february 1, 1954 decided april 5, 1954 * 347 u.s. 284 appeal from the united states district court for the southern district of new york syllabus regulations of the federal communications commission providing for the denial of licenses to radio and television broadcasting stations which broadcast so-called "give-away" programs, in which prizes are given to persons elected by chance who answer certain questions correctly but who are not required to contribute any money or other valuable consideration .....
FCC v. American Broadcasting Co., Inc. - 347 U.S. 284 (1954)
U.S. Supreme Court FCC v. American Broadcasting Co., Inc., 347 U.S. 284 (1954)
Regulations of the Federal Communications Commission providing for the denial of licenses to radio and television broadcasting stations which broadcast so-called "give-away" programs, in which prizes are given to persons elected by chance who answer certain questions correctly but who are not required to contribute any money or other valuable consideration held invalid as going beyond the scope of 18 U.S.C. § 1304, and thus exceeding the rulemaking power of the Commission. Pp. 347 U. S. 285 -297.
(a) Unless such "give-away" programs are illegal under 18 U.S.C. § 1304, the Commission cannot employ the statute to make them so by agency action. Pp. 347 U. S. 289 -290.
(b) The contribution of money or other valuable consideration by the contestants is an essential element of the offense proscribed by 18 U.S.C. § 1304, which forbids the broadcasting of "any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance." Pp. 347 U. S. 290 -291.
(c) The increased advertising value of a "give-away" program resulting from the requirement, direct or indirect, that home contestants listen to the program does not constitute a valuable consideration for purposes of 18 U.S.C. § 1304. Pp. 347 U. S. 291 -295.
(d) Section 1304 of 18 U.S.C. is a penal statute, and it must be construed strictly. P. 347 U. S. 296 .
appeal to this Court under 28 U.S.C. §§ 1253 and 2101(b), affirmed, p. 347 U. S. 297 .
These cases are before us on direct appeal from the decision of a three-judge District Court in the Southern District of New York, enjoining the Federal Communications Commission from enforcing certain provisions in its rules relating to the broadcasting of so-called "give-away" programs. The question presented is whether the enjoined provisions correctly interpret § 1304 of the United States Criminal Code, formerly § 316 of the Communications Act of 1934. This statute prohibits the broadcasting of ". . . any lottery, gift enterprise, or similar scheme offering prizes dependent in whole or in part upon lot or chance. . . ." [ Footnote 1 ]
of radio and television stations licensed by the Commission. Each of the appellees broadcasts, over its own and affiliated stations, certain programs popularly known as "give-away" programs. Generally characteristic of this type of program is the distribution of prizes to home listeners, selected wholly or in part on the basis of chance, as an award for correctly solving a given problem or answering a question. [ Footnote 2 ]
were designed to prevent the broadcast of such programs. [ Footnote 3 ] The rules are identically worded and apply, respectively, to standard radio broadcasting (AM), FM radio broadcasting,
After promulgation of the rules, the present actions were brought by the appellees. [ Footnote 4 ] The District Court sustained the Commission's general authority to adopt such rules, and sustained subdivision (1) of paragraph (b) as a correct interpretation of § 1304. But, with one dissent, the court held that subdivisions (2), (3), and (4) were beyond the scope of § 1304, and hence invalid. The court was of the view that § 1304 applied only to contest programs requiring contestants to contribute a "price" or "thing of value." [ Footnote 5 ] We noted probable jurisdiction and consolidated the cases for argument. [ Footnote 6 ]
Like the court below, we have no doubt that the Commission, concurrently with the Department of Justice, has power to enforce § 1304. Indeed, the Commission would be remiss in its duties if it failed, in the exercise of its licensing authority, to aid in implementing the statute, either by general rule or by individual decisions. [ Footnote 7 ]
All the parties agree that there are three essential elements of a "lottery, gift enterprise, or similar scheme": (1) the distribution of prizes; (2) according to chance; (3) for a consideration. [ Footnote 8 ] They also agree that prizes on the programs under review are distributed according to
scheme." Nor do the postal lottery statutes from which this language was taken. [ Footnote 9 ] The legislative history of § 1304 and the postal statutes is similarly unilluminating. [ Footnote 10 ] For guidance, therefore, we must look primarily to American decisions, both judicial and administrative, construing comparable anti-lottery legislation.
And so it is here. We find no decisions precisely in point on the facts of the cases before us. The courts have defined consideration in various ways, but, so far as we are aware, none has ever held that a contestant's listening at home to a radio or television program satisfies the consideration requirement. [ Footnote 11 ] Some courts -- with vigorous protest from others -- have held that the requirement is satisfied by a "raffle" scheme giving free chances to persons who go to a store to register in order to participate in the drawing of a prize, [ Footnote 12 ] and similarly by a "bank night" scheme giving free chances to persons who
gather in front of a motion picture theatre in order to participate in a drawing held for the primary benefit of the paid patrons of the theatre. [ Footnote 13 ] But such cases differ substantially from the cases before us. To be eligible for a prize on the "give-away" programs involved here, not a single home contestant is required to purchase anything or pay an admission price or leave his home to visit the promoter's place of business; the only effort required for participation is listening. [ Footnote 14 ]
We believe that it would be stretching the statute to the breaking point to give it an interpretation that would make such programs a crime. Particularly is this true when, through the years, the Post Office Department and the Department of Justice have consistently given the words "lottery, gift enterprise, or similar scheme" a contrary administrative interpretation. Thus, the Solicitor of the Post Office Department has repeatedly ruled that the postal lottery laws do not preclude the mailing of circulars advertising the type of "give-away" program here under attack. [ Footnote 15 ] Similarly, the Attorney General --
charged directly with the enforcement of federal criminal laws -- has refused to bring criminal action against broadcasters of such programs. [ Footnote 16 ] And, in this very action, it is noteworthy that the Department of Justice has not joined the Commission in appealing the decision below.
It is apparent that these so-called "give-away" programs have long been a matter of concern to the Federal Communications Commission; that it believes these programs to be the old lottery evil under a new guise, and that they should be struck down as illegal devices appealing to cupidity and the gambling spirit. It unsuccessfully sought to have the Department of Justice take criminal action against them. [ Footnote 17 ] Likewise, without success, it urged Congress to amend the law to specifically prohibit them. [ Footnote 18 ] The Commission now seeks to accomplish the same result through agency regulations. In doing so, the Commission has overstepped the boundaries of interpretation, and hence has exceeded its rulemaking power.
Regardless of the doubts held by the Commission and others as to the social value of the programs here under consideration, such administrative expansion of § 1304 does not provide the remedy. [ Footnote 19 ]
The Commission is authorized by § 4(i) of the Communications Act to "make such rules and regulations, and issue such orders, . . . as may be necessary in the execution of its functions"; by § 303(r) to "Make such rules and regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carry out the provisions of this chapter"; by § 307(a) and § 309(a) to grant station licenses and license renewals "if public convenience, interest, or necessity" would thereby be served; by § 312(a) to revoke a license for a violation of any regulation authorized by the Act. 48 Stat. 1068, 47 U.S.C. § 154(i); 50 Stat. 191, 47 U.S.C. § 303(r); 48 Stat. 1083, 47 U.S.C. § 307(a); 48 Stat. 1085, 47 U.S.C. § 309(a); 48 Stat. 1086-1087, 47 U.S.C. § 312(a). The "public interest, convenience, or necessity" standard for the issuance of licenses would seem to imply a requirement that the applicant be law-abiding. In any event, the standard is sufficiently broad to permit the Commission to consider the applicant's past or proposed violation of a federal criminal statute especially designed to bar certain conduct by operators of radio and television stations. And if this consideration is a proper one in individual cases, there is no reason why it may not be stated in advance by the Commission in interpretative regulations defining the prohibited conduct with greater clarity. See National Broadcasting Co. v. United States, 319 U. S. 190 , 319 U. S. 222 -224; cf. Southern Steamship Co. v. Labor Board, 316 U. S. 31 , 316 U. S. 46 -47.
A typical "lottery" is a scheme in which tickets are sold and prizes are awarded among the ticketholders by lot. See Stone v. Mississippi, 101 U. S. 814 . A typical "gift enterprise" differs from this in that it involves the purchase of merchandise or other property; the purchaser receives, in addition to the merchandise or other property, a "free" chance in a drawing. See Horner v. United States, 147 U. S. 449 . But whatever may be the factual differences between a "lottery," a "gift enterprise," and a "similar scheme," the traditional tests of chance, prize, and consideration are applicable to each. We are aware of no decision, federal or state, which has distinguished among them on the basis of their legal elements.
Similarly, cases under the postal lottery laws ( see note 9 supra ) appear to be uniform in requiring a "valuable" consideration for a "lottery, gift enterprise, or similar scheme." See Garden City Chamber of Commerce, Inc. v. Wagner, 100 F.Supp. 769, stay denied, 192 F.2d 240; Post Publishing Co. v. Murray, 230 F. 773, cert. denied, 241 U.S. 675. But cf. dictum in Brooklyn Daily Eagle v. Voorhies, 181 F. 579, 581-582.
Some of the programs involved here ( e.g., "Stop the Music," described in note 2 supra ) do not even make this requirement. As a practical matter, however, few home contestants on a "give-away" program would be in a position to answer correctly the questions asked of them unless they listened to the program.
In 1949, the Solicitor ruled that material relating to "Stop the Music" (described in note 2 supra ) would be mailable. In 1950, he ruled that material relating to a comparable contest conducted on the program "Truth or Consequences" would be mailable. While earlier rulings on a "give-away" program called had been to the contrary, the Solicitor in 1949 informally advised that the material relating to the program would be mailable. These unreported rulings were made part of the record below.
"In order for a prize scheme to be held in violation of this section, it is necessary to show (in addition to the fact that the prizes are awarded by means of lot or chance) that the 'consideration' involves, for example, the payment of money for the purchases of merchandise, chance or admission ticket, or as payment on an account, or requires an expenditure of substantial effort or time. On the other hand, if it is required merely that one's name be registered at a store in order to be eligible for the prize, consideration is not deemed to be present. "
Cf. United States v. Halseth, 342 U. S. 277 , 342 U. S. 280 -281.