BellSouth Corp v. FCC ( 1998 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 20, 1998 Decided May 15, 1998
No. 97-1113
BellSouth Corporation,
Petitioner
v.
Federal Communications Commission and
United States of America,
Respondents
AT&T Corporation, et al.,
Intervenors
On Petition for Review of an Order of the
Federal Communications Commission
Laurence H. Tribe argued the cause for petitioner. With
him on the briefs were Jonathan S. Massey, Walter H.
Alford, William B. Barfield, M. Robert Sutherland, Michael
K. Kellogg, Mark L. Evans and Robert B. McKenna.
Jacob M. Lewis, Attorney, U.S. Department of Justice,
argued the cause for respondents. With him on the briefs
were Frank W. Hunger, Assistant Attorney General, Stephen
W. Preston, Deputy Assistant Attorney General, Mark B.
Stern, Attorney, Christopher J. Wright, General Counsel,
Federal Communications Commission, and John E. Ingle,
Deputy Associate General Counsel. Catherine G. O'Sullivan
and Nancy C. Garrison, Attorneys, U.S. Department of Jus-
tice, and Carl D. Lawson, Counsel, Federal Communications
Commission, entered appearances.
Donald B. Verrilli, Jr. argued the cause for intervenors
AT&T Corp., and MCI Telecommunications Corp. With him
on the brief were David W. Carpenter, Peter D. Keisler,
Matthew B. Pachman, Mark C. Rosenblum and Roy E.
Hoffinger. Frank W. Krogh entered an appearance.
Before: Edwards, Chief Judge, Williams and Sentelle,
Circuit Judges.
Opinion for the Court filed by Circuit Judge Williams.
Dissenting opinion filed by Circuit Judge Sentelle.
Williams, Circuit Judge: Petitioner BellSouth Corporation
challenges the constitutionality of Section 274 of the Telecom-
munications Act of 1996 (the "Act"), 47 U.S.C. s 274, and of
the Federal Communications Commission's order implement-
ing that provision.1 Section 274 limits the ability of Bell
operating companies ("BOCs") to provide "electronic publish-
ing," a category that includes disseminating news articles,
offering literary material, and providing services similar to
the Lexis/Nexis and Westlaw databases. BellSouth says
s 274 is an unconstitutional bill of attainder, stressing the
fact that the subjects of its restrictions, the BOCs, are singled
__________
1 The order under challenge is Implementation of the Telecom-
munications Act of 1996: Telemessaging, Electronic Publishing,
and Alarm Monitoring Services, FCC No. 97-35 (Feb. 7, 1997).
BellSouth's challenge to the order is entirely derivative of its
constitutional challenge to the statute, with no claim that the FCC
acted outside the scope of its statutory authority.
out by name. BellSouth also complains that s 274 impermis-
sibly abridges its First Amendment rights of free expression.
We reject both challenges.
* * *
The story behind the Telecommunications Act of 1996 has
often been told, although electronic publishing restrictions
have usually amounted to little more than a subplot. In 1982
a consent decree was entered in settlement of the govern-
ment's 1974 antitrust suit against AT&T. That decree, as
modified by the district court, became known as the "Modifi-
cation of Final Judgment," or "MFJ." See United States v.
American Tel. & Tel. Co., 552 F. Supp. 131 (D.D.C. 1982),
aff'd sub nom. Maryland v. United States, 460 U.S. 1001(1983). The MFJ required AT&T to divest itself of its local
exchange monopolies. Under the reorganization plan ap-
proved by the district court, the twenty BOCs eventually
named in the 1996 Act were spun off from AT&T and
grouped into seven regional Bell operating companies, or
"RBOCs" (now five thanks to mergers), of which BellSouth is
one.2
The MFJ initially prohibited the BOCs from providing
"information services," defined to include electronic publish-
ing. The prohibition rested on two concerns commonly
voiced about regulated monopolists operating in fields adja-
cent to their monopolies. First, to the extent that the
monopolist's good or service is an input for the adjacent
industry, the monopolist may offer its own enterprise discrim-
inatory advantages, in this case "favorable access to the local
network." 552 F. Supp. at 189. Second, the monopolist may
use monopoly revenues to subsidize its associated enterprise.
Id. In a "triennial review" process established by the decree,
the Department of Justice moved to lift the information
services restrictions, and no party to the decree opposed the
motion. The district court ultimately did lift them. United
States v. Western Electric Co., 767 F. Supp. 308 (D.D.C.
__________
2 AT&T also divested its minority holdings in the Cincinnati Bell
Telephone Company and the Southern New England Telephone
Company, which are not classified as BOCs in the Act.
1991), aff'd, 993 F.2d 1572 (D.C. Cir. 1993). We will return
later to the analysis supporting that result, which BellSouth
says helps its constitutional case against s 274.
The 1996 Act rescinded the MFJ, see Pub. L. No. 104-104,
s 601, 110 Stat. 143 (1996), and changed the entire telecom-
munications landscape. Several key provisions of the Act
apply to incumbent local exchange carriers generally, such as
47 U.S.C. s 251, requiring them to offer nondiscriminatory
access and interconnection to local competitors. Sections 271
through 276 of the Act, however, entitled "Special Provisions
Concerning Bell Operating Companies," are applicable to the
BOCs and their affiliates alone.3 For example, s 271 estab-
lishes requirements that must be met before the BOCs can
break into the long distance, or "interLATA," market, see
SBC Communications, Inc. v. FCC, 1998 WL 121492 (D.C.
Cir. Mar. 20, 1998); s 273 bars the BOCs from manufactur-
__________
3 The Act defines "Bell operating company" as follows:
The term "Bell operating company"--
(A) means any of the following companies: Bell Telephone
Company of Nevada, Illinois Bell Telephone Company, Indiana
Bell Telephone Company, Incorporated, Michigan Bell Tele-
phone Company, New England Telephone and Telegraph Com-
pany, New Jersey Bell Telephone Company, New York Tele-
phone Company, US West Communications Company, South
Central Bell Telephone Company, Southern Bell Telephone and
Telegraph Company, Southwestern Bell Telephone Company,
The Bell Telephone Company of Pennsylvania, The Chesapeake
and Potomac Telephone Company, The Chesapeake and Poto-
mac Telephone Company of Maryland, The Chesapeake and
Potomac Telephone Company of Virginia, The Chesapeake and
Potomac Telephone Company of West Virginia, The Diamond
State Telephone Company, The Ohio Bell Telephone Company,
The Pacific Telephone and Telegraph Company, or Wisconsin
Telephone Company; and
(B) includes any successor or assign of any such company
that provides wireline telephone exchange service; but
(C) does not include an affiliate of any such company, other
than an affiliate described in subparagraph (A) or (B).
47 U.S.C. s 153(4).
ing and selling telecommunications equipment until they have
received authorization to enter the interLATA market; and
s 275 prohibits BOCs (other than Ameritech) from providing
alarm monitoring services for five years, see Alarm Industry
Communications Committee v. FCC, 131 F.3d 1066, 1067
(D.C. Cir. 1997). In general these provisions simply main-
tained, and in most cases loosened, various restrictions to
which the BOCs were already subject under the MFJ. By
contrast, the provision at issue here--s 274--reimposed on
the BOCs some of the information services restrictions that
had been lifted in 1991. BellSouth challenges only that
provision and the FCC order of implementation.4
Section 274 provides:
No Bell operating company or any affiliate may engage
in the provision of electronic publishing that is dissemi-
nated by means of such Bell operating company's or any
of its affiliates' basic telephone service, except that noth-
ing in this section shall prohibit a separated affiliate or
electronic publishing joint venture operated in accor-
dance with this section from engaging in the provision of
electronic publishing.
47 U.S.C. s 274(a). Section 274's restrictions expire on Feb-
ruary 8, 2000, four years from the date of the Act's passage.
s 274(g)(2).
As is evident from its text, s 274 provides two pathways for
BOCs wishing to enter electronic publishing: the "separated
affiliate" route and the "joint venture" route. The statute
defines a separated affiliate as "a corporation under common
ownership or control with a Bell operating company that does
not own or control a Bell operating company and is not owned
or controlled by a Bell operating company." 47 U.S.C.
s 274(i)(9). An "electronic publishing joint venture" is a
"joint venture owned by a Bell operating company or affiliate
__________
4 We note that another RBOC has launched a Bill of Attainder
Clause and First Amendment challenge to the "Special Provisions"
as a whole. See SBC Communications, Inc. v. FCC, 981 F. Supp.
996 (N.D. Tex. 1997).
that engages in the provision of electronic publishing which is
disseminated by means of such Bell operating company's or
any of its affiliates' basic telephone service." 47 U.S.C.
s 274(i)(5). Section 274 imposes several structural require-
ments on both separated affiliates and electronic publishing
joint ventures. See generally 47 U.S.C. s 274(b). For exam-
ple, each such entity must maintain books, records, and
accounts separately from the BOC with which it is affiliated,
s 274(b)(1), may have "no officers, directors, and employees
in common" with a BOC, s 274(b)(5)(A), and may "own no
property in common," s 274(b)(5)(B).
The Act defines "electronic publishing" broadly as
the dissemination, provision, publication, or sale to an
unaffiliated entity or person, of any one or more of the
following: news (including sports); entertainment (oth-
er than interactive games); business, financial, legal,
consumer, or credit materials; editorials, columns, or
features; advertising; photos or images; archival or re-
search material; legal notices or public records; scien-
tific, educational, instructional, technical, professional,
trade, or other literary materials; or other like or simi-
lar information.
47 U.S.C. s 274(h)(1). It then exempts several types of
services, including data processing, voice messaging, and
video programming. 47 U.S.C. s 274(h)(2).
BellSouth, of course, is not a BOC but an RBOC. Yet the
government rightly refrains from raising a standing defense
on that ground. The injury BellSouth suffered as the sole
shareholder of two affected corporations (South Central Bell
Telephone Company and Southern Bell Telephone and Tele-
graph Company) is clearly enough to give it Article III
standing. See Franchise Tax Board of California v. Alcan
Aluminium Ltd., 493 U.S. 331, 336 (1990). Besides, as an
affiliate of two BOCs, s 274(i)(1), BellSouth is itself affected;
it can engage in electronic publishing only by maintaining
structural separation from its BOCs.
Bill of Attainder Challenge
We turn first to BellSouth's challenge under Article I,
section 9, clause 3 of the Constitution, which says that "[n]o
Bill of Attainder or ex post facto Law shall be passed" by
Congress. For the framers of the Constitution the term
"bills of attainder" carried a specific meaning: it referred to
parliamentary acts sentencing named persons to death with-
out the benefit of a judicial trial. As early as 1810, however,
in Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810), Chief Justice
Marshall noted in dictum that the prohibition on bills of
attainder ought to extend to legislation subjecting specified
persons to penalties short of death--what the framers called
"bills of pains and penalties." Id. at 138; United States v.
Brown, 381 U.S. 437, 447 (1965). Later in the nineteenth
century the Supreme Court confirmed that the legislative
punishments foreclosed by the Bill of Attainder Clause in-
clude bills of pains and penalties. Cummings v. Missouri, 71
U.S. (4 Wall.) 277, 320, 323 (1866). Moreover, the Court has
recognized that not all bills of attainder expressly name their
targets; some simply describe them. Brown, 381 U.S. at 442.
In sum, the Court has developed a potentially sweeping
definition of forbidden attainders, holding that "legislative
acts, no matter what their form, that apply either to named
individuals or to easily ascertainable members of a group in
such a way as to inflict punishment on them without a judicial
trial are bills of attainder prohibited by the Constitution."
United States v. Lovett, 328 U.S. 303, 315-16 (1946). The
result is a prohibition triggered when a legislative act meets
two tests--first, that it apply with specificity, and second, that
it impose punishment.
Even classic attainders seem not only to have specified
individuals but also classes--defined as the confederates of a
named traitor, as in the case of the attainder against the Earl
of Kildare and his associates during the reign of Henry VIII.
See Cummings, 71 U.S. at 323-24. But the Supreme Court
watered down the specificity requirement a bit more when it
invalidated two post-Civil War enactments targeting all per-
sons who could not truthfully swear that they had been loyal
to the Union during the war. See Cummings; Ex parte
Garland, 71 U.S. (4 Wall.) 333 (1866). And in Lovett it said
generally that specificity is shown if the law applies to "easily
ascertainable members of a group." 328 U.S. at 315. Since
virtually all legislation operates by identifying the character-
istics of the class to be benefited or burdened, it is not clear
that the specificity requirement retains any real bite. In any
event, it is obviously met here, since s 274's requirements
apply uniquely to the twenty BOCs identified by name in the
Act.
We assume, as do the parties, that the Bill of Attainder
Clause protects corporations as well as individuals. Although
the Supreme Court has yet to address the question directly, it
has suggested as much in dictum, see Plaut v. Spendthrift
Farm, Inc., 514 U.S. 211, 239 n.9 (1995) (indicating that Bill of
Attainder Clause applies to laws that burden "a single indi-
vidual or firm"), and comparable constitutional rights have
been extended to legal "persons" taking the corporate form.
See, e.g., Metropolitan Life Ins. Co. v. Ward, 470 U.S. 869,
881 n.9 (1985) (equal protection); United States v. Martin
Linen Supply Co., 430 U.S. 564 (1977) (double jeopardy).
The clause's coverage clearly seems to include at least closely
held corporations, where an attainder would fall on a narrow-
ly circumscribed, easily identified group of flesh-and-blood
people.5 Given the parties' shared assumption, we will not
explore the issue further.
At times BellSouth comes close to arguing that the specifi-
cation requirement ought to be the end of the matter. On
this view, the Bill of Attainder Clause bars Congress from
singling out a specified class of persons for burdens of any
kind, regardless of whether those burdens can be viewed as
punishments in any ordinary sense of the term. This was the
__________
5 At least it would do so if it took the form of a conventional
penalty such as a fine. If it took the form of a restriction barring
certain closely held corporations from specific lines of business, its
effect on flesh-and-blood people would depend on the language of
the restriction and on the ability of officers, directors and share-
holders to carry on their pursuits outside the named corporations.
See below at pp. 12-13.
theme of a famous student essay, Note, The Bounds of
Legislative Specification: A Suggested Approach to the Bill
of Attainder Clause, 72 Yale L.J. 330 (1962), and traces of the
same approach can be found in the Supreme Court's most
extensive discussion (and most expansive application) of the
clause, United States v. Brown, 381 U.S. 437, 442 (1965). For
example, Brown said in a footnote that "a legislature can
provide that persons possessing certain characteristics must
abstain from certain activities, but must leave to other
tribunals the task of deciding who possesses those character-
istics." Id. at 454 n.29 (emphasis added). And Brown's
explanation of the clause "as an implementation of the separa-
tion of powers, a general safeguard against legislative exer-
cise of the judicial function, or more simply--trial by legisla-
ture," id. at 442, certainly lent itself to sweeping application.
Nonetheless, even Brown seemed at times to limit itself to
punishments, saying, for example, that the clause "reflected
the Framers' belief that the Legislative Branch is not so well
suited as politically independent judges and juries to the task
of ruling upon the blameworthiness of, and levying appropri-
ate punishment upon, specific persons." Id. at 445. Such a
limitation is practically indispensable: given the demise of the
requirement that a forbidden attainder fall on named individ-
uals, and the elusive character of Brown's own effort to
articulate a coherent specificity test to replace that require-
ment, see 381 U.S. at 455 n.29, a definition of attainder that
encompassed any burden imposed on specified individuals or
groups would cut a broad swath, mowing down much of the
Supreme Court's equal protection jurisprudence at a single
stroke.
In any event, whatever Brown's potential for diluting the
punishment requirement, the Supreme Court has since taken
that requirement seriously. It made this emphatically clear
in Nixon v. Administrator of General Services, 433 U.S. 425(1977), where the law at issue burdened a single person.
Despite the statute's surgical focus on a sole individual, the
Court held that "the mere specificity of a law does not call
into play the Bill of Attainder Clause," id. at 471 n.33, and
indeed that Congress had on that occasion singled out "a
legitimate class of one," id. at 472.6 It insisted that the
burden must be a punishment to qualify as a bill of attainder,
and considered three questions in determining whether it
was. Id. at 478-84. Despite Chief Justice Burger's sugges-
tion that the Nixon precedent itself would become a "class of
one," id. at 544-45 (Burger, C.J., dissenting), the Court later
formalized the punishment inquiry into a three-part test,
asking
(1) whether the challenged statute falls within the histor-
ical meaning of legislative punishment; (2) whether the
statute, viewed in terms of the type and severity of
burdens imposed, reasonably can be said to further
nonpunitive legislative purposes; and (3) whether the
legislative record evinces a congressional intent to pun-
ish.
Selective Service System v. Minnesota Public Interest Re-
search Group, 468 U.S. 841, 852 (1984) (citations and internal
quotation marks omitted). Unlike our dissenting colleague,
Dissent at 3, 5, 6, we see no warrant in the precedents for
treating Congress's specification of the BOCs by name as a
material element in the punishment analysis. Cf. Brown, 381
U.S. at 461 (describing supposed contrast between naming
and mere specification as a "distinction[ ] without a differ-
ence"). We take up each of the three factors in turn.
To begin with, s 274's restrictions are nothing like the
classic attainders known to the framers. As mentioned
above, bills of attainder at common law generally entailed
execution, although this was typically coupled with other
punishments, such as "corruption of blood," which prevented
__________
6 See also Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 239 n.9
(1995) ("[L]aws that impose a duty or liability upon a single
individual or firm are not on that account invalid--or else we would
not have the extensive jurisprudence that we do concerning the Bill
of Attainder Clause, including cases which say that it requires not
merely 'singling out' but also punishment, see, e.g., United States v.
Lovett, 328 U.S. 303, 315-18 (1946), and a case which says that
Congress may legislate 'a legitimate class of one,' Nixon v. Admin-
istrator of General Services, 433 U.S. 425, 472 (1977).")
the attainted party's heirs from inheriting his property. See
Brown, 381 U.S. at 441. Bills of pains and penalties, also
forbidden by the clause, "commonly imposed imprisonment,
banishment, and the punitive confiscation of property." Se-
lective Service System, 468 U.S. at 852.
The case becomes closer when we move from historic
antecedents to burdens later found by the Supreme Court to
rank as punishments, which have included "legislative bars to
participation by individuals or groups in specific employments
or professions." Id. at 852. Indeed, the Court's four major
decisions invalidating statutes on Bill of Attainder Clause
grounds have all involved legislation preventing specific
classes of persons from pursuing certain occupations. Those
four cases came in two pairs. The first pair involved restric-
tions imposed immediately after the Civil War on those who
had sided with the South, see Cummings (striking down
amendments to Missouri constitution denying right to vote,
hold office, teach, or serve as trustee for religious organiza-
tion to persons who aided or sympathized with the Confedera-
cy), and Garland (striking down federal law requiring attor-
neys to swear oath that they had never assisted Confederacy
as condition of admission to practice in federal courts).7 The
second pair involved restrictions on Communist Party mem-
bers during the Cold War, see Lovett (invalidating law cutting
off payment of salaries to three named federal employees who
were Party members), and Brown (invalidating law making it
a crime for members of Party to serve as officers or employ-
ees of labor unions).
Although a statute imposing structural separations on cor-
porations seeking to engage in specific types of commercial
activity may be analogous to such traditional employment
debarments, the analogy is very loose indeed. Even if we
ignore the BOCs' freedom under s 274 to enter electronic
publishing through structurally separated affiliates, the sec-
tion is nothing more than a line-of-business restriction, com-
__________
7 See also Pierce v. Carskadon, 83 U.S. (16 Wall.) 234 (1872)
(memorandum opinion striking down West Virginia loyalty oath
similar to those invalidated in Cummings and Garland).
parable for example to the Glass-Steagall Act's limitation on
the entry of commercial banks into investment banking, 12
U.S.C. ss 24 (Seventh), 78, or to the cross-ownership restric-
tions on broadcasters upheld in FCC v. National Citizens
Committee for Broadcasting, 436 U.S. 775 (1978). Although
membership in the class of commercial banks or broadcasting
firms is easy enough to ascertain, no one has suggested that
those laws work an unconstitutional attainder. Indeed the
Supreme Court in Brown strongly suggested that line-of-
business restrictions pose no bill of attainder concerns, distin-
guishing the statute at issue there, which barred Communists
from high office in labor unions, from s 32 of the Banking Act
of 1933 (now codified at 12 U.S.C. s 78), a conflict-of-interest
statute preventing employees of securities underwriting firms
from working for banks that belong to the Federal Reserve
System. Brown, 381 U.S. at 453-55; see also Board of
Governors v. Agnew, 329 U.S. 441 (1947) (upholding s 32 of
Banking Act, though without addressing bill of attainder
issue). Brown reasoned that each of the invalidated employ-
ment prohibitions "inflict[ed] its deprivation upon the mem-
bers of a political group thought to present a threat to the
national security," 381 U.S. at 453, and further contrasted the
conflict-of-interest statute as "incorporat[ing] no judgment
censuring or condemning any man or group of men." Id. at
453-54. It is apparent--and will be more so when we exam-
ine legislative purpose--that s 274 falls on the nonpunitive
side of those lines.
Placing s 274 among the burdens historically forbidden as
attainders seems especially dubious because it does not bar
the BOCs from electronic publishing but simply requires
structural separation. As counsel for BellSouth acknowl-
edged at oral argument, the separated affiliate mechanism
permits his client to establish a wholly-owned subsidiary to
pursue electronic publishing. This subsidiary could dissemi-
nate materials over the telephone lines of BellSouth's BOC
subsidiaries, as long as it was kept separate from them in the
ways prescribed by s 274(b). Indeed, BellSouth itself could
enter the electronic publishing business provided it observed
the norms of separation from its BOCs. In short, s 274
leaves all the investors with stakes in the BOCs (i.e., the
shareholders of the RBOCs) free to pursue their collective
electronic publishing ends, and to aggregate their capital to
achieve those ends, subject only to structural separation
requirements. While structural separation is hardly costless,
neither does it remotely approach the disabilities that have
traditionally marked forbidden attainders.
The second criterion asks whether the challenged legisla-
tion, considering the type and severity of the burdens it
imposes, can reasonably be said to further nonpunitive legis-
lative purposes. This factor appears to be the most impor-
tant of the three. See Siegel v. Lyng, 851 F.2d 412, 418 (D.C.
Cir. 1988) ("The line of Supreme Court law on the Bill of
Attainder Clause indicates that legislation will survive Bill of
Attainder attack if the statute furthers nonpunitive legislative
purposes."). On the one hand, where an enactment falls
outside the historical definition of punishment, the second
factor prevents Congress from circumventing the clause by
cooking up newfangled ways to punish disfavored individuals
or groups. Selective Service System, 468 U.S. at 853-54. On
the other hand, "[e]ven measures historically associated with
punishment--such as permanent exclusion from an occupa-
tion--have been otherwise regarded when the nonpunitive
aims of an apparently prophylactic measure have seemed
sufficiently clear and convincing." Laurence H. Tribe, Amer-
ican Constitutional Law, s 10-5, at 655 (2d ed. 1988).
In fact, apart from its specific targeting aspect, we find that
s 274 has the earmarks of a rather conventional response to
commonly perceived risks of anticompetitive behavior. We
have long recognized that structural separation is "a permissi-
ble regulatory tool" for ensuring "that no cross-subsidization
or unfair competitive practices occur." Computer and Com-
munications Industry Ass'n v. FCC, 693 F.2d 198, 219 (D.C.
Cir. 1982). We return shortly to the realism of those risks,
but pause here to note that BellSouth's claim of punitive
purpose is somewhat undermined by s 274's placement in an
Act that as a whole relieves the BOCs of several of the
burdens imposed by the MFJ, particularly by prescribing in
s 271 a method whereby the BOCs can achieve a long-sought-
after presence in the long-distance market.8
BellSouth advances two arguments in support of its claim
that Congress cannot reasonably be said to have enacted
s 274 for nonpunitive purposes. First, it says the court's
1991 removal of the information services prohibition from the
MFJ--based on a finding that its removal could reasonably
be found to advance the public interest (balancing the risk of
BOC discrimination against competing information services
ventures with the competitive benefits of BOC entry)--shows
that Congress in 1996 had no plausible economic basis for
reimposing electronic publishing restrictions. Second, Bell-
South points to other local exchange carriers who are not
covered by s 274's proscriptions. To the extent the BOCs
pose any anticompetitive threat, says BellSouth, then so do
the excluded firms, and their exclusion demonstrates that
Congress's real aim was to punish the BOCs.
As we said earlier, the information services ban was lifted
from the MFJ at the behest of the Department of Justice,
which had insisted on the ban when the MFJ was being
negotiated. Circumstances had changed, the government
argued; the information services market had become more
competitive, and the BOCs' ability to discriminate and cross-
subsidize had consequently decreased. The district court
initially rejected the government's proposal, United States v.
Western Electric Co., 673 F. Supp. 525, 587-97 (D.D.C. 1987),
but we reversed, saying that the court had used too stringent
a standard to evaluate the government's motion, which no
party to the consent decree had opposed. United States v.
Western Electric Co., 900 F.2d 283, 292 (D.C. Cir. 1990). On
remand the district court lifted the information services ban.
United States v. Western Electric Co., 767 F. Supp. 308(D.D.C. 1991). We affirmed, noting that under the applicable
__________
8 Because we find no attainder, we need not wrestle with the issue
of remedy. Severability is largely a matter of legislative intent, and
it is doubtful that Congress would have intended the many provi-
sions of the Act beneficial to the BOCs to survive deletion of this
burdensome one.
"public interest" standard "the record before the court was
such that any district court rejection of the proposed modifi-
cation would have been reversible error." United States v.
Western Electric Co., 993 F.2d 1572, 1577-78 (D.C. Cir. 1993).
That record, we said, contained "persuasive evidence that,
despite their local monopoly power, the BOCs will be unable
to discriminate against competing information service provid-
ers." Id. at 1579-80. We also concluded that there was
powerful evidence to counter any suggestion that the BOCs
would be able to use their price-regulated monopolies to
subsidize their entry into information services. Id. at 1580-
81.
Obviously Congress's reading of the evidence in 1996 was
different from the one arrived at by the Department of
Justice in 1987--or by this court in 1993 for that matter. It
does not follow from these conflicts between branches, howev-
er, that Congress cannot rationally be said to have pursued
nonpunitive purposes in enacting s 274. Certainly our trien-
nial review decisions never suggested that the risks of anti-
competitive conduct were so feeble that no one could reason-
ably assert them except as a smokescreen for some invidious
purpose (much less for the specific invidious purpose of
"punishing" the BOCs). And we note that s 274 is less
severe than the analogous pre-1991 MFJ provision along
several dimensions: it applies only to electronic publishing
rather than to information services as a whole, it expires after
five years rather than continuing indefinitely, and it mandates
structural separation rather than complete exclusion.
BellSouth complains that this reading of the second factor
reduces it to little more than a rational basis test, the most
anemic form of constitutional scrutiny. If this were strictly
true, of course, the Bill of Attainder Clause (as applied to
non-suspect classes such as the BOCs) would do nothing more
than duplicate the Equal Protection Clause. But the Su-
preme Court's attainder inquiry is in fact more exacting than
a rational basis test, because it demands purposes that are
not merely reasonable but nonpunitive. Punitive purposes,
however rational, don't count.
BellSouth's second argument focuses on the fact that s 271
does not cover several large non-BOC local exchange carriers,
in particular GTE Corporation.9 GTE, which was never part
of the AT&T system, supplies about 18.4 million access lines
in 27 states; by comparison, BellSouth supplies about 24.5
million access lines in nine states. 1996 FCC Statistics of
Communications Common Carriers 21 (1997). Although its
operations are generally rural, as of 1993 "GTE control[led]
local exchange service in the entire state of Hawaii as well as
in large portions of the Tampa and Los Angeles markets."
United States v. Western Electric Co., 993 F.2d at 1579.
Other non-BOC carriers, such as Southern New England
Telephone with about 2.1 million access lines in Connecticut,
are also not covered by s 274. 1996 FCC Statistics of
Communications Common Carriers 21 (1997). From this
selectivity--which BellSouth labels underinclusiveness--Bell-
South would have us draw an inference of punitive purpose.
But the differential treatment of the BOCs and non-BOCs
is neither suggestive of punitive purpose nor particularly
suspicious. Because the BOCs' facilities are generally less
dispersed than GTE's, they can exercise bottleneck control
over both ends of a telephone call in a higher fraction of cases
than can GTE. The BOCs thus enjoy a materially greater
opportunity to shift costs from their electronic publishing
pursuits to their rate-regulated local exchange ventures.10 In
__________
9 Like the BOCs, GTE was subject to a consent decree for more
than a decade, until the passage of the Act. The decree, however,
permitted GTE to provide information services, subject to structur-
al separation and non-discrimination requirements. See United
States v. GTE Corp., 603 F. Supp. 730, 742 (D.D.C. 1984).
10 While in 1993 we somewhat disparaged the distinction then
drawn between GTE and the BOCs on the basis of relative disper-
sion, United States v. Western Electric Co., 993 F.2d at 1579, we did
so solely with respect to the claim of discrimination against compet-
ing providers. Our reasoning was that the BOCs could not easily
sort out information services transmissions, or intra-corporate
transmissions, on the customer end of a call, as they would have to
do in order to discriminate efficiently. Id. That deficiency would
not seem to impede cost-shifting, where the regulated monopoly
addition, because GTE (unlike the BOCs) is not the dominant
provider of local exchange service in any state except Hawaii,
state regulators can use the costs of its local competitors as
benchmarks against which to measure whether it is engaging
in improper cost allocation. Thus the distinction drawn by
Congress seems quite understandable without resort to infer-
ences of punitive purpose.
The third device for identifying a punishment focuses on
legislative intent, and in practice appears to differ from the
second only in inviting a journey through legislative history.
On this point we can be brief. BellSouth simply has not come
forward with the kind of "unmistakable evidence of punitive
intent which ... is required before a Congressional enact-
ment of this kind may be struck down" as an attainder.
Selective Service System, 468 U.S. at 855-56 n.15 (quoting
Flemming v. Nestor, 363 U.S. 603, 619 (1960)). Aside from a
few scattered remarks referring to anticompetitive abuses
allegedly committed by the BOCs in the past, BellSouth has
provided no legislative history even touching on the purposes
behind s 274, much less presenting "smoking gun" evidence
of congressional vindictiveness.
In sum, we hold that s 274 is not a bill of attainder.
First Amendment Challenge
BellSouth complains that s 274 abridges its constitutional
right of free speech by restricting its ability to provide
electronic publishing. Clearly the structural separation re-
quirements regulate expressive activity within the scope of
the First Amendment. So, as is often the case in the First
Amendment arena, the parties devote much of their energy
toward disputing the appropriate standard of review. Bell-
South argues that s 274 warrants strict scrutiny for two
reasons: first, because it singles out named corporations for
speech restrictions, and second, because it is content-based.
The FCC says that s 274 is a content-neutral regulation and
__________
attempts to deceive regulators about which costs belong in the
regulated enterprise and which in the other.
should instead be evaluated under the intermediate standard
of review applied by the Supreme Court in its decisions
upholding the cable television "must-carry" rules. See Tur-
ner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994)
("Turner I") (determining that intermediate scrutiny applied);
Turner Broadcasting System, Inc. v. FCC, 117 S. Ct. 1186(1997) ("Turner II") (upholding must-carry provisions under
intermediate scrutiny). We agree with the FCC that an
intermediate level of scrutiny is appropriate.
We begin with BellSouth's claim that s 274 warrants strict
First Amendment review because it targets named corpora-
tions. In support of this claim BellSouth cites our decision in
News America Publishing, Inc. v. FCC, 844 F.2d 800 (D.C.
Cir. 1988). That case concerned a provision that prohibited
the FCC from granting extensions of temporary waivers of
the newspaper/television cross-ownership rules to all then-
current holders of such temporary waivers--a class of one, as
it turned out. We struck down the provision on First Amend-
ment and equal protection grounds, noting that "[w]here
legislation affecting speech appears underinclusive, i.e., where
it singles out some conduct for adverse treatment, and leaves
untouched conduct that seems indistinguishable in terms of
the law's ostensible purpose, the omission is bound to raise a
suspicion that the law's true target is the message." Id. at
804-05. Contrary to BellSouth's assertion, however, News
America does not stand for the proposition that statutes
singling out particular persons for speech restrictions auto-
matically merit strict scrutiny. In fact we chose among
standards only to the extent of saying that the provision could
not survive any standard of review more exacting than a
rational basis test. Id. at 802, 814.
Only marginally more promising for BellSouth are the
Supreme Court's decisions in Minneapolis Star & Tribune
Co. v. Minnesota Commissioner of Revenue, 460 U.S. 575(1983), and Arkansas Writers' Project v. Ragland, 481 U.S.
221 (1987). In both cases the Court applied strict scrutiny to
invalidate state tax laws that had the effect of disproportion-
ately burdening certain segments of the press. In Minne-
apolis Star, because the challenged use tax exempted the
first $100,000 in ink and paper consumed by a publication in a
given year, its burden was borne by fewer than one in twenty
newspapers in the state, with two-thirds of it landing on one
publisher alone. 460 U.S. at 578-79. The sales tax struck
down in Arkansas Writers' Project appeared to spread its net
more broadly, covering general interest magazines but ex-
empting newspapers and religious, professional, trade, and
sports magazines. 481 U.S. at 224. In fact, however, "the
magazine exemption mean[t] that only a few Arkansas maga-
zines pa[id] any sales tax," giving the tax a targeting effect
comparable to that of the Minneapolis Star tax. Id. at 229.
The Supreme Court has explained the two cases as meaning
only that strict scrutiny must be applied to regulations that
target a small subset of media organizations in ways that
threaten to "distort the market for ideas." Turner I, 512
U.S. at 660 (quoting Leathers v. Medlock, 499 U.S. 439, 448
(1991)). The Court has expressly declined to draw the broad
lesson "that the First Amendment mandates strict scrutiny
for any speech regulation that applies to one medium (or a
subset thereof) but not others." Turner I, 512 U.S. at 660.11
News America, Minneapolis Star, and Arkansas Writers'
Project all featured some suggestion that the legislature's
differential treatment of speakers was motivated by the con-
tent of their speech. See Turner I, 512 U.S. at 660 ("Al-
though there was no evidence that an illicit governmental
motive was behind either of the taxes, both were structured
in a manner that raised suspicions that their objective was, in
fact, the suppression of certain ideas.").12 It is that sugges-
tion, rather than the act of "singling out" by itself, that
triggers strict First Amendment scrutiny, as Turner I made
clear. See id. at 658 ("[S]peaker-based laws demand strict
__________
11 In a similar vein, we have described Minneapolis Star and
Arkansas Writers' Project as "likely addressed only to the special
complexities of taxation." Walsh v. Brady, 927 F.2d 1229, 1236
(D.C. Cir. 1991).
12 In fact, the tax exemption challenged in Arkansas Writers'
Project facially excluded certain publications on the basis of their
content, rendering it especially suspect. 481 U.S. at 229-30.
scrutiny when they reflect the Government's preference for
the substance of what the favored speakers have to say (or
aversion to what the disfavored speakers have to say).").
Here, there is no indication that s 274's coverage was
limited to the BOCs because of any concern about the content
of their speech--no indication, in other words, that "the
legislature's speaker preference reflects a content prefer-
ence." Id. "So long as they are not a subtle means of
exercising a content preference, speaker distinctions of this
nature are not presumed invalid under the First Amend-
ment." Id. at 645. In addition, Turner I held that "height-
ened scrutiny is unwarranted when the differential treatment
is 'justified by some special characteristic of' the particular
medium being regulated." Id. at 660-61 (quoting Minne-
apolis Star, 460 U.S. at 575). Congress's imposition of
structural separation on the BOCs because of their status as
price-regulated bottleneck monopolies is certainly no more
suggestive of any effort to exercise a content preference than
were the must-carry provisions upheld in Turner, see Turner
I, 512 U.S. at 661 (identifying "bottleneck monopoly power"
held by cable operators as a special characteristic of the cable
medium).
We turn next to BellSouth's claim that s 274 is expressly
formulated in terms of content, and thus requires strict
scrutiny. To be sure, s 274 defines the field of expression to
which it applies by reference to a set of categories that might
in a formal sense be described as content-based. Thus it
covers items such as "news," "entertainment," and "research
material," and exempts information such as "video program-
ming," "voice messaging," and "data processing." See
s 274(h)(1).
Nothing about the provision, however, suggests an underly-
ing purpose to favor or disfavor particular viewpoints, nor
does BellSouth advance such a suggestion. The Supreme
Court has held that statutes lacking such a purpose are likely
to be deemed content-neutral. "[L]aws that confer benefits
or impose burdens on speech without reference to the ideas
or views expressed are in most instances content-neutral."
Turner I, 512 U.S. at 643. Indeed the very breadth of
s 274's categories undermines any claim that Congress
adopted a categorical approach out of a desire to favor any
particular viewpoint or idea. Further, to a large extent
neutrality is now gauged by reference to a statute's justifica-
tions: "Government regulation of expressive activity is con-
tent neutral so long as it is justified without reference to the
content of the regulated speech." Ward v. Rock Against
Racism, 491 U.S. 781, 791 (1989) (emphasis in original) (cita-
tion omitted). The goal of remedying bottleneck problems is
independent of content and viewpoint.
In summary, then--despite BellSouth's twin contentions
that s 274 favors certain speakers, and certain types of
speech, over others--we hold that intermediate scrutiny is
appropriate because here, perhaps even more than in Turner,
there is simply no hint that "the government has adopted a
regulation of speech because of [agreement or] disagreement
with the message it conveys." Turner I, 512 U.S. at 642(quoting Ward, 491 U.S. at 791).
A regulation will be upheld under intermediate scrutiny "if
it advances important governmental interests unrelated to the
suppression of free speech and does not burden substantially
more speech than necessary to further those interests." Tur-
ner II, 117 S. Ct. at 1186 (citing United States v. O'Brien, 391
U.S. 367, 377 (1968)). The requirement of an important
governmental interest is amply met here. The asserted
interest underlying s 274 is to promote competition by dis-
couraging discrimination and cross-subsidization by the
BOCs. This is not only important, see Turner I, 512 U.S. at
644, but "unrelated to the suppression of free speech"; in-
deed, the interest in preventing truly anticompetitive behav-
ior in the electronic publishing marketplace is an interest in
the enhancement of speech. Cf. id. at 663.
Under intermediate scrutiny, while the government obvi-
ously need not meet the most rigorous standard of "narrow
tailoring," it must nonetheless "demonstrate that the recited
harms are real, not merely conjectural, and that the regula-
tion will in fact alleviate these harms in a direct and material
way." Id. at 664. In determining whether the government
has made this showing, we owe Congress's economic judg-
ments considerable deference, so as not to "infringe on tradi-
tional legislative authority to make predictive judgments
when enacting nationwide regulatory policy." Turner II, 117
S. Ct. at 1189; see also id. at 1203-05 (Breyer, J., concurring)
(deferring to Congress's non-economic objectives). Aside
from noting the various executive branch (and judicial) posi-
tions taken in connection with removal of the MFJ's restric-
tion, which bear no more weight here than in the bill of
attainder analysis, see pp. 11-12 above, BellSouth does not
claim that Congress's apparent concern about anticompetitive
risks was unreasonable.
But it does complain that Congress could have guarded
against these risks through less speech-restrictive methods,
for instance by imposing non-structural safeguards such as
accounting requirements. Intermediate First Amendment
scrutiny, however, does not entail a "least restrictive means"
analysis. See Turner II, 117 S. Ct. at 1199-1200. It is at
least plausible that structural separation will more effectively
meet the perceived anticompetitive threat than would lesser
restrictions, and although BellSouth characterizes the addi-
tional burden of structural separation as "enormous" (com-
pared with, for example, special accounting rules), it offers
neither detail nor quantitative evidence to support this char-
acterization.
As in its bill of attainder attack, BellSouth points to the
exclusion of GTE and other non-BOC local exchange carriers.
But as we said in that connection, there are plausible reasons
for the exclusion, and, just as BellSouth failed in that context
to suggest a punitive purpose, here it equally fails to suggest
any intent to favor non-BOCs' viewpoints over BOCs'. More-
over, since intermediate scrutiny demands that the govern-
ment "not burden substantially more speech than necessary
to further [its] interests," Turner II, 117 S. Ct at 1186, it
would be odd to strike down a statute because Congress
failed to restrict as much expression as it could have--
presumably because of a judgment that the interest justifying
a restriction in one context, though "important," was slightly
less so than in the other and therefore, at the margin,
outweighed by competing interests (including free speech).
See Walsh v. Brady, 927 F.2d 1229, 1238-39 (D.C. Cir. 1991)
(Williams, J., concurring).
Finally, we note again that s 274 leaves each RBOC free to
publish electronically, using the facilities of its BOC subsidiar-
ies, either directly or through a subsidiary, so long as the
acting corporation conforms to the statutory separation re-
quirements. BellSouth argues that the separated affiliate
mechanism is entirely irrelevant to the First Amendment
question, since "[i]t hardly answers one person's objection to
a restriction on his speech that another person, outside his
control, may speak for him." Arkansas Writers' Project, 481
U.S. at 231 (internal quotations omitted). While undoubtedly
true in the context of natural persons, this observation carries
less weight in the context of controlled subsidiaries. The
First Amendment does not normally permit the government
to justify a prohibition on a corporation's speech by pointing
to the fact that its shareholders remain free to express
themselves without restriction; corporations exist in signifi-
cant part to overcome precisely the sorts of collective action
problems that the shareholders in that scenario would then
face. But there is no collective action problem here. The
investors in BellSouth are free to use whatever portion of
their pooled resources they wish for electronic publishing,
subject only to the need for structural separation. This is not
to say that structural separation requirements count as mere-
ly insubstantial burdens from a First Amendment perspec-
tive--they do not. Cf., e.g., FEC v. Massachusetts Citizens
for Life, 479 U.S. 238, 252-54 (1986) (noting disclosure and
record-keeping requirements entailed by corporation's use of
segregated political contribution fund). But the fact that
s 274 leaves RBOCs like BellSouth free to pursue electronic
publishing strengthens our conclusion that s 274 does not
restrict substantially more speech than necessary.
* * *
The petition for review is
Denied.
Sentelle, Circuit Judge, dissenting: With respect to the
First Amendment argument of the Bell operating companies
("BOCs"), I agree with the majority's analysis and with its
conclusion. With respect to the bill of attainder claim, how-
ever, I agree with most of the majority's analysis; I simply
conclude that it does not support the majority's conclusion.
The majority opinion sets forth the provisions of 47 U.S.C.
s 274, and I will not rehash them here, beyond a brief
summary to set the stage for my dissent. That section
prohibits Bell operating companies, by name, and their affili-
ates, from engaging in the provision of a lucrative line of
business on the same terms as competitors, potential competi-
tors, or anyone else in the world. BellSouth argues that this
provision constitutes legislative punishment for their past
course of business conduct, and as such, runs afoul of Article
I, section 9, clause 3 of the Constitution, which provides that,
"No Bill of Attainder or ex post facto law shall be passed."
As the majority notes, while the term "Bill of Attainder"
may have originally referred to parliamentary acts sentencing
persons to death without a trial by the judiciary, Maj. Op. at
7, the Supreme Court early held that the prohibition extends
to legislative punishment of specified persons beyond capital
punishment. Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810).
As the majority further notes, the court has developed a
clearly identifiable bill-of-attainder jurisprudence under which
"legislative acts, no matter what their form, that apply either
to named individuals or to easily ascertainable members of a
group in such a way as to inflict punishment on them without
a judicial trial are bills of attainder prohibited by the Consti-
tution." United States v. Lovett, 328 U.S. 303, 315-16 (1946).
As the majority reasons, the result of this progressive revela-
tion of jurisprudence is that the prohibition against bills of
attainder is "triggered when a legislative act meets two
tests--first, that it apply with specificity, and second, that it
impose punishment." Maj. Op. at 7. I completely agree.
What I do not understand about the majority opinion is why,
having fully loaded its analysis with specificity and punish-
ment, the majority is unable to pull the trigger in this case.
On its face, the legislation before us appears to fall square-
ly on the condemned side of this two-part test. Section 274
exhibits nearly unprecedented specificity, forbidding twenty
named corporations, alone out of over 1,300 local exchange
carriers, from entering a trade or business on the same terms
as others. Of all the bill of attainder cases decided by the
Supreme Court, in only one did a statute single out individu-
als by name, and that was deemed an unconstitutional bill of
attainder. See Lovett, 328 U.S. 303. And, as the Supreme
Court has held, "legislative bars to participation by individu-
als or groups in specific employments or professions" do
indeed constitute punishment within the meaning of this test.
Selective Service System v. Minnesota Public Interest Re-
search Group, 468 U.S. 841, 852 (1984). Absent the Supreme
Court's decision in Nixon v. Administrator of General Ser-
vices, 433 U.S. 425 (1977), I think we would rule this an
unconstitutional bill of attainder without going further.
Mere specificity may not make an act a bill of attainder,
but in most cases the Court has required little more. The
Court has described the Bill of Attainder Clause as the
embodiment of a fundamental principle of separation of pow-
ers: "a legislature can provide that persons possessing cer-
tain characteristics must abstain from certain activities, but
must leave to other tribunals the task of deciding who pos-
sesses those characteristics." United States v. Brown, 381
U.S. 437, 454 n.29 (1965). But Nixon precludes defining a bill
of attainder solely in terms of its specificity. In that case,
Congress acted against a single, named individual for disfa-
vored treatment as compared to "all other Presidents or
members of the Government." 433 U.S. at 470. After a
herculean struggle, the Court concluded that the statute
could be upheld because "appellant constituted a legitimate
class of one...." Id. at 472. The majority upholding that
statute included Justice Stevens, who noted in his separate
concurrence that "[t]he very specificity of the statute would
mark it as punishment, for there is rarely any valid reason for
such narrow legislation; and normally the Constitution re-
quires Congress to proceed by general rulemaking rather
than by deciding individual cases." Id. at 485-86 (Stevens, J.,
concurring). Just so. And absent that Nixon decision, the
theory advanced by Brown and echoed by Justice Stevens
would in my view be an adequate basis for striking down the
present legislation.
Nixon, of course, is a unique case. It involved a disgraced
President of the United States who had, as Justice Stevens
pointed out, "resigned his office under unique circumstances
and accepted a pardon for any offenses committed while in
office," thereby "plac[ing] himself in a different class from all
other Presidents." Id. at 486. Despite my respect for the
Supreme Court, I must say that this case may well be
evidence of the classic statement that hard cases make bad
law. The majority circumvented the apparent status of the
statute, singling out one President by name, with an uncon-
vincing analysis holding that the burden placed upon him was
not a punishment. Chief Justice Burger's dissent, 433 U.S. at
536-45, noted the anomalous character of the decision legiti-
mating a " 'class of one' ... under the Bill of Attainder
Clause." Id. at 545. Without that decision, the analysis
suggested by Justice Stevens would impel if not compel a
decision that the statute before us runs afoul of that clause.
The legislative imposition of a burden solely on a class of
individuals defined by name rather than by characteristic
(although not a class of one as in the case of Nixon) on its
face bespeaks an intent to punish rather than to merely
regulate. But still, the Nixon decision is a Supreme Court
decision, and whether a good one or a bad one, it binds us.
Because of that decision, and its convoluted analysis holding
nonpunitive the unprecedented burdening of a "class of one,"
we must undertake a more careful analysis of "punishment"
under the three-part test of Selective Service System, 468
U.S. 841.
In what appears to have been an attempt to cabin its
reasoning in Nixon, the Court in Selective Service System
announced a three-part test to determine whether a statute
imposes "punishment" for purposes of the Bill of Attainder
Clause:
(1) whether the challenged statute falls within the histor-
ical meaning of legislative punishment; (2) whether the
statute, viewed in terms of the type and severity of
burdens imposed, reasonably can be said to further
nonpunitive legislative purposes; and (3) whether the
legislative record evinces a congressional intent to pun-
ish.
Id. at 852 (internal punctuation omitted). This test leads inexorably
to a conclusion that the statute before us is a bill of attainder.
As to the first part of the test, even the majority must
recognize that "legislative bars to participation by individuals
or groups in specific employments or professions," id., have
constituted the most common sort of statutes struck down by
the Court as unconstitutional bills of attainder. Nixon simply
does not change this fact. The Court in Nixon distinguished
the statute before it as nonpunitive--not only did the statute
fail to inflict any harm previously held to be "forbidden
deprivations," but its provision for " 'just compensation' ...
undercut[ ] even a colorable contention that the Government
has punitively confiscated appellant's property...." 433 U.S.
at 475. Here, given the history of treating line-of-business
restrictions as punishment, such an easy escape is not avail-
able.
Under Selective Service, we probably need go no further;
nevertheless, analysis under the additional parts of that test
support the conclusion that this statute is unconstitutional.
The second prong asks "whether the statute, viewed in terms
of the type and severity of burdens imposed, reasonably can
be said to further nonpunitive legislative purposes." 468 U.S.
at 852 (internal punctuation omitted). In my view, it cannot.
The majority concludes that it can, stating: "apart from its
specific targeting aspect, we find that s 274 has the earmarks
of a rather conventional response to commonly perceived
risks of anticompetitive behavior." Maj. Op. at 13. While
the latter portion of this statement may be true, I do not see
how we can analyze the statute in terms "apart from its
specific targeting aspect." The statute does not address the
characteristics of local exchange carriers that create risks of
anticompetitive behavior. If it did, it would speak of those
characteristics, which might well be shared by, for example,
GTE or Sprint. See Illinois Bell Tel. Co. v. FCC, 740 F.2d
465, 476 (7th Cir. 1984) (noting that even small LECs may
have the "ability to abuse a monopoly position"). Then,
whether or not a particular carrier possessed the relevant
characteristics and therefore should be restricted would be
subject to judicial determination. By naming the companies
rather than describing the characteristics creating the risks,
it seems apparent that Congress aimed, not at protecting
present and future markets from potential abuse of monopoly
power, but at punishing those named companies' past anti-
competitive behavior. I agree with today's majority that the
second factor "appears to be the most important of the
three." Maj. Op. at 13. I cannot, however, agree with the
majority that it cuts against the characterization of section
274 as a bill of attainder.
I further conclude that the third factor, which I deem the
least important, also supports classifying the statute as a bill
of attainder. That factor requires us to examine "whether
the legislative record evinces a congressional intent to pun-
ish." Selective Service, 468 U.S. at 852 (internal punctuation
omitted). In my view it does. As the majority notes, "scat-
tered remarks" in the legislative history "refer[ ] to anticom-
petitive abuses allegedly committed by the BOCs in the
past...." Maj. Op. at 17. While I find the very existence of
the scattered remarks to be indicative of the punitive intent
behind the statute, I do not find them conclusive. We have
noted before that "[a]t its best, legislative history is an
undependable guide to the meaning of a statute." Gersman
v. Group Health Ass'n, Inc., 975 F.2d 886, 890 (D.C. Cir.
1992). I suggest that it is no more dependable in ascertain-
ing the motive behind the statute.
More instructive on congressional motivation than the scat-
tered remarks is the timing and apparent triggering of the
enactment. As the majority notes in its discussion of factor
two, Congress passed section 274 after the judiciary removed
the information services prohibition from the modified final
judgment. Maj. Op. at 14-15. The reinstatement of that ban
following its judicial removal to me bespeaks, indeed shouts, a
motive on the part of the Article I branch to reimpose a
burden on the parties before the court which the Article III
branch found no longer appropriate. While I have no quarrel
with the legitimacy of a congressional motive to correct what
it sees as an improper application of legal protection against
future conduct, when Congress defined the burdened class by
name rather than by characteristic or future action, I can
discern no other motive than an intent to react to (read
"punish") the past conduct of those named persons. This, I
suggest, violates the principle underlying Article I, section 9,
clause 3, given short shrift by the majority.
That is, the prohibition against bills of attainder and ex
post facto laws is an essential part of the Constitution's
structural separation of powers among the three branches of
government. As the majority's analysis suggests, that clause
was designed to prevent punishment "without the benefit of a
judicial trial." Maj. Op. at 7. By way of comparison, in
Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995), the
Supreme Court struck down as unconstitutional a congres-
sional enactment "to the extent that it require[d] federal
courts to reopen final judgments entered before its enact-
ment." Id. at 240. While the statute before us does not
literally run afoul of that prohibition, it partakes of the same
sort of violation of separation of powers safeguards. That is,
it does not simply regulate or prohibit future conduct or
create a ban on the entry into a line of business based on
risks of future anticompetitive behavior, but rather, it singles
out for such a ban, such a burden, named entities. It is one
thing for the legislature to attempt to protect competition by
defining a standard against which the conduct of individuals
can be measured. It is quite another for it to simply list the
names of individuals who Congress perceives as having un-
controllable monopolistic tendencies. This short-circuits the
factfinding and due process protections of trial in an Article
III court, and therefore runs afoul of the structural provisions
embodied in the Constitution's Bill of Attainder Clause.
I would say in closing that the majority's discussion of the
lightness of the burden, typified by the ways in which a BOC
might restructure in order to get around it, goes only to the
weight of the punishment, not its character as punishment.
Thus, that part of the majority's reasoning does nothing to
convince me that the statute can survive constitutional scruti-
ny.