Action for Children v. FCC ( 1993 )

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-2225
ACTION FOR CHILDREN'S TELEVISION,
Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION, ET AL.,
Respondents.
COALITION ON SMOKING OR HEALTH,
Intervenor.
ON PETITION FOR REVIEW OF AN ORDER
OF THE FEDERAL COMMUNICATIONS COMMISSION
Before
Boudin, Circuit Judge,
Campbell, Senior Circuit Judge,
and Stahl, Circuit Judge.
Sharon L. Webber with whom Angela J. Campbell and Henry Geller
were on brief for petitioner and intervenor.
C. Grey Pash, Jr., Counsel, Federal Communications Commission,
with whom Renee Licht, Acting General Counsel, Federal Communications
Commission, Daniel M. Armstrong, Associate General Counsel, Federal
Communications Commission, Robert B. Nicholson, Attorney, United
States Department of Justice, and Marion L. Jetton, Attorney, United
States Department of Justice, were on brief for respondents.
July 22, 1993
BOUDIN, Circuit Judge. Action for Children's Television
("ACT") petitions for review of the decision of the Federal
Communications Commission denying ACT's request that the FCC
take action to combat "hidden commercials" on television that
promote smoking. We deny the petition.
In 1966, acting on a private citizen petition, the FCC
required broadcasters, under the "fairness doctrine," to air
anti-smoking messages in response to advertisements by
cigarette companies. See Banzhaf v. FCC, 405 F.2d 1082 (D.C.
Cir. 1968), cert. denied, 396 U.S. 842 (1969).1 In 1969,
Congress enacted the Cigarette Labeling and Advertising Act
("the Cigarette Act"), 15 U.S.C. 1331 et seq., which
pertinently provided that "it shall be unlawful to advertise
cigarettes or little cigars over any medium of electronic
communication subject to the jurisdiction of the Federal
Communications Commission." 15 U.S.C. 1335.
In 1970, an organization called Action on Smoking and
Health ("ASH") petitioned the FCC to require broadcasters to
continue to air anti-smoking messages, despite the
prohibition contained in the Cigarette Act, partly on the
ground that the cigarette industry was using "hidden
1The fairness doctrine was an FCC rule requiring
broadcasters to air contrasting views when controversial
issues were addressed. See Red Lion Broadcasting Co. v. FCC,
395 U.S. 367 (1968). The rule was abandoned by the
Commission in August 1987. See Syracuse Peace Council v.
FCC, 867 F.2d 654 (D.C. Cir. 1989), cert. denied, 493 U.S.
1019 (1990).
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commercials" to circumvent the Act. The quoted phrase, as
ACT uses it, refers to cigarette company sponsorship of
sporting events during which the cigarette brand name or logo
is displayed on signs or banners, which in turn are broadcast
during televised coverage of these events, such as the
Marlboro Grand Prix auto race and the Virginia Slims tennis
tournament. The FCC denied the ASH request. The agency said
that it found no hard evidence of the use of "hidden
commercials" by the cigarette industry, and concluded that
"if such abuses do occur . . . , the appropriate action in
such an eventuality would be to secure full and effective
compliance with the 1969 law, and not to deal with it by
offsetting anti-smoking messages." Formulation of
Appropriate Further Regulatory Policies Concerning Cigarette
Advertising and Antismoking Presentations, 27 F.C.C.2d 453,
458 n.5 (1970).
In 1990, ACT filed with the FCC the petition at issue in
this case. ACT claimed that there is now indisputable
evidence that the cigarette industry is using "hidden
commercials." According to the petition the Department of
Justice has never initiated any enforcement proceedings under
the Cigarette Act and therefore appears to have concluded
that hidden commercials do not violate the statute, creating
the need for FCC action. ACT requested the FCC to issue a
"declaratory ruling" requiring licensees to air anti-smoking
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messages to offset the harm caused by the hidden advertising.
Because the fairness doctrine was no longer in existence, ACT
relied on the "public interest standard" set forth in the
Communications Act of 1934 to govern the regulation and
licensing of broadcasters. 47 U.S.C. 303; see also id.
307(a), 309(a), 310(d).
ACT's petition was denied by the Commission in August
1992. In re Petition For Declaratory Relief Regarding Anti-
Smoking Messages Filed by Action for Children's Television, 7
F.C.C.R. 5466 (1992). The FCC said that this issue had been
raised and resolved in the 1970 proceedings brought by ASH,
and that ACT had presented nothing new. The Commission
stated that it "continue[d] to believe that the Cigarette Act
itself is properly looked to as defining both the conduct
that is prohibited [with respect to cigarette advertising]
and the remedies that are available to redress violations."
Id. It is undisputed that the Department of Justice, not the
FCC, is exclusively charged with enforcing the provisions of
the Cigarette Act. See 15 U.S.C. 1339. ACT now petitions
this court for review.2
2It appears that ACT, which had been a Massachusetts
corporation, was formally dissolved as of December 31, 1992,
after its petition was filed in this court. By letter, the
FCC says that ACT's dissolution "raises the question whether
it continues to be a party aggrieved" by the FCC's action.
In response ACT points out that under Massachusetts law, a
dissolved corporation "shall nevertheless be continued as a
body corporate for three years . . . for the purpose of
prosecuting or defending suits by or against it." Mass. G.L.
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An agency's decision not to undertake a new project,
regulation, or enforcement action has been treated by courts
as a somewhat unusual animal in the menagerie of agency
actions that may be presented for judicial review. Of
course, where there is a statutory obligation on the agency
to take a relatively specific action, a court might easily
conclude that it had both a standard to apply to a shirking
agency and a duty to enforce the standard. More often,
agencies make decisions not to act under rather broad
statutory standards or, as is typically true of enforcement
actions, under a general mandate to enforce the law.
In such cases courts have been reluctant to second-guess
agencies when they decline to act. In some areas,
paralleling prosecutorial decisions not to seek indictment,
courts are reluctant to intervene at all; in others, they
have recognized great discretion in the agency when it
declines to act and required only minimal justification. See
Heckler v. Chaney, 470 U.S. 821 (1985); United Church of
Christ v. FCC, 911 F.2d 813 (D.C. Cir. 1990). As the circuit
most experienced in these matters said in another case,
ch. 155, 51; see also City Communications, Inc. v. Detroit,
888 F.2d 1081, 1086-87 (6th Cir. 1989) (looking to state
corporate law to determine standing of dissolved
corporation). Given the statute coupled with the FCC's
posture on the issue, we think that denial of the petition on
the merits is the proper course.
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Natural Resources Defense Council, Inc. v. SEC, 606 F.2d
1031, 1046 (D.C. Cir. 1979) (citations omitted):
An agency's discretionary decision not to regulate
a given activity is inevitably based, in large
measure, on factors not inherently susceptible to
judicial resolution -- e.g., internal management
considerations as to budget and personnel;
evaluations of its own competence; weighing of
competing policies within a broad statutory
framework.
This court has made similar observations, see, e.g.,
Ward v. Skinner, 943 F.2d 157, 161 (1st Cir. 1991), and the
standard of deference thus adopted controls this case. We
need not conclude that the FCC's refusal to undertake a rule-
making is automatically immune from judicial review, no
matter how egregious the occasion or how troubling the
agency's explanation. Here, the FCC's explanation is quite
rational. In sum, the agency ruled that Congress provided a
general ban on television cigarette advertising as part of a
"comprehensive" federal program, 15 U.S.C. 1331, and, if
the ban is being infringed at the margins, Department of
Justice enforcement is the preferable course. Given the
FCC's broad discretion as to how to deploy its limited
resources, this is an adequate explanation.
ACT says that the explanation is faulty to the extent
that hidden commercials are a "loophole" in the law and thus
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beyond the reach of the Department of Justice.3 Even if
this were so, it would not make the FCC's position
unreasonable. Instead, it could rationally leave to Congress
the task of adjusting the balance it struck in its
"comprehensive" statute. Plugging loopholes might also be a
rational goal for the agency (we have no occasion here to
consider preemption arguments); but agency resources are
limited and selecting which rational goals to pursue is part
of the agency's function.
There is even less to ACT's alternative criticism that
the FCC's decision in this case is inconsistent with its
reasoning in its earlier decision declining to act on ASH's
petition. ACT argues that the FCC there declined to act
because it found a lack of evidence that hidden commercials
were a significant problem and, ACT says, it has now provided
the missing evidence. But the FCC went on to say in the ASH
case that, if the problem proved real, the solution would be
"to secure full and effective compliance with the 1969 law,
and not to deal with it by offsetting anti-smoking messages."
27 F.C.C.2d at 458 n.5. There is no inconsistency.
The petition for review is denied.
3There is in fact some indication that the Department of
Justice has taken the view that hidden commercials violate
the statute and has written to cigarette companies and
broadcasters warning them of its position. Whether or not
this is the Department's present view is not material.
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