Court Opinion

ID: 6932754
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:12:57.732526+00
Date Added: 2024-06-11T16:07:16.985537
License: Public Domain

NOONAN, Circuit Judge,
dissenting:
The court, by judicial legerdemain, has converted a live case, in which four telephone companies challenge an act of Congress severely and irrationally restricting their freedom of speech, into a dead case in which there is no issue before the court. Instead of exercising a federal court’s virtually unflagging obligation to exercise its jurisdiction, this court carefully refuses to examine the controversy put before it for decision. Instead of enforcing the Constitution of the United States, this court says that some other court, some other day, can do the job. The decision is incompatible with our duty as federal judges and wrong in its analysis of the case presented, for two reasons. First, GTECA’s authority to carry a signal in Cer-ritos has not expired. Second, Pacific Telesis Group, Pacific Bell, and Nevada Bell, interve-nors, have claims before the court unmooted by the expiration of GTECA’s license. In what follows I will enlarge on these reasons and then address the merits of the controversy that so vigorously and visibly is pressed upon us for resolution.
*948First. The FCC, in the order appealed by GTECA, commanded that GTECA “SHALL COME INTO COMPLIANCE with the telephone eompany/cable television cross-ownership restriction within 120 days from the date this decision is released.” This order is resisted by GTECA on the ground that it is already in compliance with all that can be constitutionally required of it. The FCC asserts that GTECA no longer has any authority to maintain cable facilities in Cerritos. The controversy is live and palpable.
The court in the majority opinion misconceives GTECA’s appeal as an attempt “to convert the five-year waiver into a permanent waiver.” To the contrary, as GTECA formulated its appeal in its opening brief, GTECA “seeks reversal of a decision of the Federal Communications Commission rendered on November 9, 1993.” That decision explicitly took two actions: “we rescind the original rule waiver in its entirety. We also rescind GTECA’s associated Section 214 authorizations to operate and maintain the coaxial and fiber optic cable facilities in Cerri-tos.” The rescission of the waiver is not an issue because the waiver has expired by its own terms. The rescission of the Section 214 authority remains before the court. GTE-CA’s position is that it may continue to act under its Section 214 authority without a waiver because the statute keeping telephone companies from being television programmers is constitutionally defective.
The court says: “We need only determine whether the authority for which the waiver was required, i.e. video programming, expired with the waiver.” It would be difficult to put the issue more mistakenly. GTECA nowhere contends that it was “granted permanent Section 214 authority to engage in video programming by the FCC,” and the court, deciding that GTECA never had such authority, decides an issue not before it. What GTECA argues is that the FCC cannot deny authorization solely on the ground that GTECA is a telephone company. That argument, the substance of GTECA’s appeal, cannot be dodged by deciding an issue never raised.
The court’s further discussion of mootness is, accordingly, misplaced. There is no need to explore the criteria of mootness when a live controversy exists between appellant and appellee.
Second. By our order of January 21,1994, Pacific Telesis Group, Pacific Bell and Nevada Bell were allowed to intervene in this appeal. The intervenors, as they declare, are building a multi-billion dollar information highway, in which video programming is expected to become part of a telephone network. The intervenors’ plans are of great significance to the populations of California and Nevada. The intervenors’ plans are partially blocked by the challenged statute. The intervenors’ interests are as much involved as GTECA’s in contesting the constitutionality of legislation that so radically reduces their right to do their own video programming.
Intervenors Pacific Telesis Group, Pacific Bell and Nevada Bell are not mere amici curiae, whose arguments and briefs may be read if the court chooses. Intervenors, they are before this court challenging the statute on its face. Nothing has mooted their challenge. Even if the court were correct in its mistaken analysis of GTECA’s appeal, the intervenors’ case calls for decision: “The weight of authority in the United States Courts of Appeals supports the principle that an intervenor can continue to litigate after the dismissal of the party who originated the action.” Benavidez v. Fong Eu, 34 F.3d 825, 830 (9th Cir.1994), quoting United States Steel Corp. v. EPA 614 F.2d 843, 845 (3d Cir.1979); see also 7C Wright, Miller and Kane, Federal Practice and Procedure § 1920 at 491 (2d ed. 1986).
The majority attempts to distinguish Be-navidez, supra, as though it were an ad hoc disposition of a single case, rather than a precedent to which we have an obligation. Unless good reason appears to distinguish Benavidez, we are bound to follow it in similar situations. This is a similar situation. That the intervenors did not participate in the FCC proceedings is surely not disposi-tive; Benavidez cited with approval a case where the Court of Appeals remanded to the district court to allow an individual to intervene who did not intervene before the case was heard on appeal. Benavidez at 831, *949citing Atkins v. Bd. of Educ. of North Carolina, 418 F.2d 874 (4th Cir.1969). In Bena-videz itself the state defendant had argued that dismissal of the intervenors’ complaint was appropriate because the intervenors’ “only interest in intervention was to ensure that, should the district court fashion a remedy, that remedy would comport with the Voting Rights Act.” Id. We held that this narrow reading mischaraeterized the interve-nors’ claim, noting that despite dismissal of the original plaintiffs in that case, the inter-venors still had a cognizable interest in contesting the validity of the redistricting plan. Like the state in Benavidez, the majority here ignores the broad issue raised by the intervenors. As we wrote in Benavidez, “refusing to allow the intervenors to continue would lead to senseless delay, because a new suit would inevitably bring the parties, at a much later date, to the point where they are now.” Id. As in Benavidez, the majority’s refusal to allow the intervenors’ case to continue is based on a mischaracterization of their claims and will result in senseless delay.
Third. The court states: “This ease also presents a serious question of exhaustion because GTECA did not present the constitutional issue to the Commission at a point in the proceedings where it could have tried to obviate the constitutional question by granting discretionary relief, such as a permanent waiver.” The court does not develop this “serious question” further. But the court had earlier answered its own question in these words: “Because the Commission has no power to declare Section 583(b) unconstitutional ... we can assume it will continue to require telephone companies to comply with it.” GTECA was not required to do a futile act. Reid v. Engen, 765 F.2d 1457, 1461 (9th Cir.1985) (“We may decide an issue not raised in an agency action if the agency lacked either the power or the jurisdiction to decide it”). To imply that GTECA should have raised the constitutional issue as a ploy to induce the FCC to exercise discretion is to turn the requirement of the exhaustion of administrative remedies into a game of bunts and sacrifice plays. That is not the purpose of the exhaustion requirement. See Weinberger v. Salfi, 422 U.S. 749, 765, 95 S.Ct. 2457, 2466-67, 45 L.Ed.2d 522 (1975). GTE-CA was not required to ask the FCC to do what the FCC had no power to do.

THE MERITS

The case being properly before us, although not decided by my colleagues, I go on to indicate what its proper resolution should be.
The Level of Review. The level of review of the constitutionality of Section 533 is intermediate. Turner Broadcasting System, Inc. v. Federal Communications Commission, - U.S .-, -, 114 S.Ct. 2445, 2469, 129 L.Ed.2d 497 (1994). Consequently, the statute will be sustained if it furthers a “substantial governmental interest,” which is “unrelated to the suppression of free expression,” and the incidental restriction on speech is “no greater than is essential to the furtherance of that interest.” Id., quoting United States v. O’Brien, 391 U.S. 366, 377, 88 S.Ct. 1665, 1679, 20 L.Ed.2d 640 (1968).
Substantial Government Interest Unrelated To The Suppression Of Free Expression ? The statute, the FCC informs the court, is “intended to promote diversity of ownership in local mass media,” a purpose which has been a long-standing goal of national telecommunications policy. FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775, 789-90, 98 S.Ct. 2096, 2109-10, 56 L.Ed.2d 697 (1978). The purpose is a purpose of general antitrust law, specifically adapted to the mass media. As the purpose is to multiply the number of voices speaking, the statute does discriminate against the telephone companies; it does suppress their speech. But where ownership of a newspaper or a cable TV station along with a broadcast station has been the issue, this kind of governmental promotion of diversity, accompanied by governmental discrimination against the speech of the newspaper-broadcaster, has been permitted. Id. According to precedent, the governmental interest is substantial and, if not unrelated to the sup*950pression of speech of some entities, is nonetheless not treated as censorship.
Essential To The Furtherance Of That Interest? Speech, the statute does affect, however. The statute, therefore, must meet the third criterion of Turner. As elaborated by Turner, “essential to the furtherance” of the governmental interest means that the methods chosen by the government do not “‘burden substantially more speech than is necessary to further the government’s legitimate interests’.” Turner — U.S. at -, 114 S.Ct. at 2469, quoting Ward v. Rock Against Racism, 491 U.S. 781, 799,109 S.Ct. 2746, 2758, 105 L.Ed.2d 661 (1989). To show that this criterion is met, the FCC argues as follows: In most areas telephone companies enjoy a monopoly. A telephone parent could subsidize a video-programming affiliate by transferring its costs to the parent, which would impose them on the customers of its telephone lines. A telephone company could also discriminate against those competing with it in cable TV by making it more difficult for these competitors to maintain interconnections with the national telecommunications network. By preventing these speculated evils from occurring, the statute furthers the substantial interest of the government and burdens no more speech than is necessary to achieve that end.
These arguments are, to begin with, very wide of the mark. They are arguments against cross-ownership of a telephone company and cable TV. But the statute does not bar a telephone company from owning cable TV. Section 533 only precludes programming by a telephone company. It is a restriction squarely focused on the speech of the telephone company.
The prevention of speculative evils is insufficient to justify the statute’s suppression of speech. We must accord “substantial deference to the predictive judgments of Congress.” Id. at -, 114 S.Ct. at 2471. But we must be assured “that, in formulating its judgments, Congress has drawn reasonable inferences based on substantial evidence.” Id. The “recited harms” must be “real, not conjectural.” Id. at -, 114 S.Ct. at 2470. Abstractly, the FCC’s argument has a certain plausibility. Concretely, not only is it conjectural, it is contrary to fact. The FCC itself regulates the accounting of GTECA and requires that GTECA maintain separate accounting for all costs associated with its cable operation under Section 214. The FCC itself has found in this case that its requirements are sufficient to prevent the misallocation of cable costs to telephone customers. The FCC has found that its regulations are regularly sufficient to prevent such misallo-eations. “Based upon our experience with such safeguards,” the FCC has reported to Congress, “we continue to believe that they constitute an effective means of preventing cross-subsidization between regulated and nonregulated services.” FCC, Second Report And Order, Recommendation To Congress, And Second Further Notice Of Proposed Rulemaking, (Video Dialtone Order) 7 FCC Red 5781, 5829 (July 16, 1992). The FCC, no doubt, is entitled to change its mind based on new experience. But the FCC refers to no new experience that occurred between July 16, 1992, and April 11, 1994, when it filed its brief in this case that would make one doubt the sufficiency of the FCC regulations controlling a telephone company’s accounting for costs. It may well be doubted that the FCC is free to tell Congress that its controls are adequate and to tell this court that they are inadequate. It is certain that such double talk undermines all confidence in the conjecture on which the Commission relies.
As for the putative discrimination by telephone companies against competitors, the FCC refers, with great vagueness, to having received “complaints that telephone companies were in various ways misusing their monopoly telephone service power .to favor cable television operations in which they had an interest.” The validity of these old complaints — they are dated as occurring in 1970 — is unsubstantiated on the record. The FCC does not demonstrate that “the recited harms are real.”
Not only is there a lack of demonstration that the statute furthers the governmental *951interest in diversity, but there is substantial evidence that the statute does the opposite. In the case at bar, the application of the statute will deprive Cerritos of its only cable service. Throughout the country it is notorious fact that cable systems are frequently monopolies, whose only competition is provided by broadcast television. To shut out the telephone companies as cable programmers, as the statute so comprehensively does, is to shut out the only kind of enterprise likely to challenge the cable TV monopolist.
In its Video Dialtone Order of July 1992, the Commission itself reviewed the market, the changing technology, and the great opportunities for providing more information to the public by the entry of telephone companies as cable operators. The Commission formally recommended to Congress that the Cable Act be amended to eliminate the ban of Section 533. The Commission stated: “We find that such an amendment would further promote our overarching goals in this proceeding by increasing competition in the marketplace, spurring the investment necessary to deploy an advanced infrastructure, and increasing the diversity of services made available to the public.” Video Dialtone Order, 7 FCC rec. at 5847. What facts have changed since the Commission made this considered judgment in July 1992? We are not told of any. In the Commission’s own report, Section 533 is not essential, not necessary, but counterproductive. It does not survive intermediate review under the First Amendment. It does not even survive rationality review. It is an irrational obstruction to the exercise of free speech.