Source: http://www.law.cornell.edu/supremecourt/text/347/284
Timestamp: 2014-12-28 09:08:05
Document Index: 638424116

Matched Legal Cases: ['§ 1304', '§ 1304', '§ 316', '§ 3', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 1304', '§ 316', '§ 402', '§ 402', '§ 1336', '§ 10', '§ 1009', '§ 1031', '§ 402', '§ 4', '§ 303', '§ 307', '§ 309', '§ 312', '§ 154', '§ 303', '§ 307', '§ 309', '§ 312', '§ 1305', '§ 1302', '§ 1303', '§ 1304', '§ 316', '§ 316', '§ 1304']

FEDERAL COMMUNICATIONS COMMISSION v. AMERICAN BROADCASTING CO., Inc. FEDERAL COMMUNICATIONS COMMISSION v. NATIONAL BROADCASTING CO., Inc. FEDERAL COMMUNICATIONS COMMISSION v. COLUMBIA BROADCASTING SYSTEM, Inc. | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews FEDERAL COMMUNICATIONS COMMISSION v. AMERICAN BROADCASTING CO., Inc. FEDERAL COMMUNICATIONS COMMISSION v. NATIONAL BROADCASTING CO., Inc. FEDERAL COMMUNICATIONS COMMISSION v. COLUMBIA BROADCASTING SYSTEM, Inc.
347 U.S. 284 (74 S.Ct. 593, 98 L.Ed. 699)
FEDERAL COMMUNICATIONS COMMISSION v. AMERICAN BROADCASTING CO., Inc. FEDERAL COMMUNICATIONS COMMISSION v. NATIONAL BROADCASTING CO., Inc. FEDERAL COMMUNICATIONS COMMISSION v. COLUMBIA BROADCASTING SYSTEM, Inc.
Argued: Feb. 1, 1954.
[HTML] The Federal Communications Commission, concurrently with the Department of Justice, has power to enforce the statute prohibiting the broadcasting of any lottery or similar scheme offering prizes dependent upon lot or chance, but its power in such respect is limited by the scope of the statute. 18 U.S.C.A. § 1304.
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 * * *.'
The appellees are national radio and television broadcasting companies. They are, in addition, the operators 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.
The rules challenged in this proceeding, §§ 3.192, 3.292, and 3.656 of the Commission's Rules and Regulations, were designed to prevent the broadcast of such programs.
The rules are identically worded and apply, respectively, to standard radio broadcasting (AM), FM radio broadcasting, and television broadcasting. Paragraph (a) of each rule provides that 'An application for construction permit, license, renewal of license, or any other authorization for the peration of a broadcast station, will not be granted where the applicant proposes to follow or continue to follow a policy or practice of broadcasting * * *,' programs of a sort forbidden by § 1304. Paragraph (b) provides that a program will fall within the ban
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'.
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.
But the Commission's power in this respect is limited by the scope of the statute. Unless the 'give-away' programs involved here are illegal under § 1304, the Commission cannot employ the statute to make them so by agency action. Thus, reduced to its simplest terms, the issue before us is whether this type of program constitutes a 'lottery, gift enterprise, or similar scheme' proscribed by § 1304.
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.
They also agree that prizes on the programs under review are distributed according to chance, but they fall out on the question of whether the home contestant furnishes the necessary consideration.
'* * * Where a scheme of chance is successfully designed to reap profits for its promoter, there will ultimately be consideration flowing from the participants, and it is of no consequence whether such consideration be direct or indirect. In either event, the gambling spiritthe lure of obtaining something for nothing or almost nothingis exploited for the benefit of the promoter of the scheme.'
Section 1304 itself does not define the type of consideration needed for a 'lottery, gift enterprise, or similar scheme'. Nor do the postal lottery statutes from which this language was taken.
The legislative history of § 1304 and the postal statutes is similarly unilluminating.
For guidance, therefore, we must look primarily to American decisions, both judicial and administrative, construing comparable antilottery 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.
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,
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.
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.
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.
Similarly, the Attorney General charged directly with the enforcement of federal criminal lawshas refused to bring criminal action against broadcasters of such programs.
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.
Likewise, without success, it urged Congress to amend the law to specifically prohibit them.
The Commission now seeks to accomplish the same result through agency regulations. In doing so, the Commission has over-stepped the boundaries of interpretation and hence has exceeded its rule-making 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.
18 U.S.C. 1304, 18 U.S.C.A. § 1304 (derived from former § 316 of the Communications Act of 1934, 48 Stat. 10881089, repealed by 62 Stat. 862, 866):
The actions were brought under § 402(a) of the Communications Act of 1934, 48 Stat. 1093, 47 U.S.C. 402(a), 47 U.S.C.A. § 402(a); 28 U.S.C. 1336, 1398, 2284, 23212325, 28 U.S.C.A. §§ 1336, 1398, 2284, 23212325; and § 10 of the Administrative Procedure Act, 60 Stat. 243, 5 U.S.C. 1009, 5 U.S.C.A. § 1009. Pub.L.No.901, 81st Cong., 2d Sess., 64 Stat. 1129, 5 U.S.C. 1031, 5 U.S.C.A. § 1031, has since changed the procedure under § 402(a), but is inapplicable to actions commenced prior to its enactment.
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), 47 U.S.C.A. § 154(i); 50 Stat. 191, 47 U.S.C. 303(r), 47 U.S.C.A. § 303(r); 48 Stat. 1083, 47 U.S.C. 307(a), 47 U.S.C.A. § 307(a); 48 Stat. 1085, 47 U.S.C. 309(a), 47 U.S.C.A. § 309(a); 48 Stat. 10861087, 47 U.S.C. 312(a), 47 U.S.C.A. § 312(a). The 'public interest, convenience, or necessity' standard for the issuance of licenses would seem to imply a requirement that the applicant be lawabiding.
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, 222224, 63 S.Ct. 997, 10111013, 87 L.Ed. 1344; cf. Southern Steamship Co. v. National Labor Relations Board, 316 U.S. 31, 4647, 62 S.Ct. 886, 894895, 86 L.Ed. 1246.
Section 1304 is one of five sectionss 1301 through § 1305 which constitute 'Chapter 61Lotteries' of Title 18. Section 1305, added in 1950, exempts certain 'fishing contests' from the operation of the other four sections. Section 1301 prohibits the importing or transporting of lottery tickets; § 1302, the mailing of lottery tickets and related matter; § 1303, the participation in lottery schemes by postmasters and postal employees; and § 1304, the broadcasting of lottery information. These four sections use the same terminology'any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance'. This language first appeared in the 1909 amendments to the federal lottery laws. 35 Stat. 1129, 1130, 1136. It was adopted verbatim in § 316 of the Communications Act of 1934, which was the first federal statute to ban the broadcasting of lotteries. With only slight modifications not material here, § 316 became § 1304 of the Criminal Code in the 1948 revision of Title 18.
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, D.C.E.D.N.Y., 100 F.Supp. 769, stay denied, 2 Cir., 192 F.2d 240; Post Publishing Co. v. Murray, 1 Cir., 230 F. 773, certiorari denied 241 U.S. 675, 36 S.Ct. 725, 60 L.Ed. 1232. But cf. dictum in Brooklyn Daily Eagle v. Voorhies, C.C.E.D.N.Y., 181 F. 579, 581582.
Cf. United States v. Halseth, 342 U.S. 277, 280281, 72 S.Ct. 275, 276277, 96 L.Ed. 308.