American Broadcasting Co. v. United States ( 1953 )

CLARK, Circuit Judge

(dissenting).

Judge LEIBELL’S masterly analysis of the case shows that the only point of doubt or concern is as to whether “consideration” is given in return for a chance at substantial and valuable prizes or financial awards. Though earnestly argued by the several plaintiffs, the other contentions — some rising to the constitutional level — are unconvincing and I agree with the court in overruling them. But on the one issue which thus proves controlling, I do not feel that my brothers have reached a result which is consistent with law, or, indeed, with reason, and I accordingly dissent.

Before I turn to this, I shall briefly dispose of some underbrush. It seems to me that not only was the Federal Communications Commission justified in tackling this thorny subject, but, indeed, it was its duty to do so and it is to be commended for its efforts at length to have the matter definitely determined. Like the enforcement of all sumptuary or moralistic legislation, there is a natural desire to pass the buck to others; and this may be accentuated where a showing of criminality would be required for the pressing of an indictment. But when the Congress says that “Whoever broadcasts by means of any radio station for which a license is required by any law of the United States” shall not do certain things under pain of fine and imprisonment, 18 U.S.C. § 1304, the licensing authority must surely take some heed of the mandate and act accordingly if it is not to wink at or impliedly approve the law’s violations. So it does seem to me that past actions or refusals to act of other governmental agencies or officers have little bearing on our problem. Suffice it to say that now the Commission and the Department of Justice are loyally and co-operatively engaged in advancing what they — and I — think to be a correct interpretation of law. Against this there obviously can be no estoppel to operate against either the United States of America or any one of its agencies.

Now I turn to the specific issue. It is well to recall the statute, now a part of the Criminal Code, 18 U.S.C. § 1304, formerly a part of the Federal Communications Act, 47 U.S.C. § 316, adopted in June, 1934. Its prohibition is against “the broadcasting of, any advertisement of or information concerning any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance, or any list of the prizes drawn or awarded by means of any such lottery, gift enterprise, or scheme.” I emphasize two matters: (1) Within the prohibition are not merely lotteries, but gift enterprises and any “similar scheme” offering prizes dependent upon “chance”; (2) the statute does not mention “consideration.” I stress the first because there does seem to be a feeling in the case that it concerns “buying” a ticket to the drawing of some grand prize in the good old-fashioned sweepstakes manner. But the statute is much broader, as broad in fact as it could possibly be made for the objectives in view. It is more inclusive, for example, than such a statute as N.Y. Penal Law, McK.Unconsol.Laws, c. 40, § 1370 reaching “the distribution of property by chance, among persons who have paid or agreed to pay a valuable consideration for the chance.” So it is not without significance that when Congress in 1950 wished to validate “any fishing contest not conducted for profit wherein prizes are awarded for the specie, size, weight, or quality of fish caught by contestants in any bona fide fishing or recreational event,” it felt it had to do this by specific exemption. 18 U.S.C. § 1305. And the omission of any reference to consideration — unlike the New York statute, for example — carries its own meaning. The federal law contains no technical requirement of consideration as such; whatever is read into the statute must be what will carry out its essential purpose.

Now the essential purpose cannot be oversimplified to debauchery by a single grand lottery, or even several lotteries, as the initial and leading case of Horner v. United States, 147 U.S. 449, 13 S.Ct. 409, 37 L.Ed. 237, is at pains to point out. Rather it is aimed at a somewhat less direct road to waste and want: the lack of industry and initiative induced by initial success in getting valuable returns from the operation of chance. There is also quite specifically the unjust enrichment which accrues to the manipulators of the scheme. But it is still possible for anyone — advertiser, broadcaster, or what not — to make pure gifts; the Commission calls attention to the plot of a moving picture of twenty years ago, “If I Had a Million,” and says that if “a rich man gives away his millions to persons chosen at random, it may be conceded that no evil would be done and no violation of the law would be involved.” So what we are looking for is really some gain to the promoters of the scheme which takes the matter out of the realm of pure altruism.

This, of course, greatly simplifies the problem. But I believe it makes sense of it, too. To inquire whether the broadcasters and their advertising customers are engaged in altruistic operations is of course to supply the answer at once. What they are doing is to purchase time to advertise and vend their wares — indeed the most valuable time conceivable, as is alleged in the papers before us and conceded by all.¹ The time spent by a single listener may be quite brief. But the time spent 'by the whole country in hanging for an hour more or less breathlessly upon a nationwide broadcast which may (but probably will not) yield the listeners returns ranging from refrigerators, pianos, and trips to South America to good hard ¡cash beyond their wildest dreams provides SO' stupendous an audience for the advertising message as hardly to be estimated. And I suspect that the time spent by any single listener is almost always considerable. A few fleeting moments will not be adequate to learn what the rules are, hear and guess the tune or the answer to the question, and accept' and answer the fateful telephonic inquiry. One is just impelled to hear the hour out, and, having gotten the hang of it, to come back the following week, and have the family listen as a part of the game until the announcer calls.

My brothers, it seems to me, are drawn away from the natural answer by the odd mistake that what is involved as the “price” or “valuable consideration” (terms themselves constituting an overprecise formulation of the issue, as I have pointed out) is not value “to the station or sponsor,” but “It is the value to the participant of what he.gives that must be weighed.” Of course, the participant must yield something; if he is quite supine, there would be a gift. But surely the application made by my brothers quite inverts the requirement and makes it meaningless and irrational. It is what the operator receives — in terms of value to himself — which must necessarily mark the difference between a gift and a chance, between altruism and business. The opinion appears to hold that while receiving the benefit of something as valuable as this radio time does not cast doubt upon the sponsor’s altruism, yet the participant’s expenditure of any pecuniary amount — -even “a cent,” see note 5 of the opinion' — makes the scheme at once illegal.² And the amount given need not even go to the operator. Such a view not only makes evasion easy and enforcement in natural course difficult, if not impossible; it also— and I say this with deference — makes the whole approach irrational. To say that here we have pure donation, whereas we would have a lottery if the participant were required to deposit a penny in a collection plate, or even a dime in a Marchrof-Dimes kettle, just does not make sense. The applicable test is not any strict doctrine of yielding a symbolic peppercorn to formalize a contract or a conveyance. It is a practical one, perceptive of the fact that the yield to the operator is surely all important. And this is recognized in the well reasoned cases, such as State v. Wilson, 109 Vt. 349, 196 A. 757, cited below.

If the issue can thus be made comparatively simple, why has so considerable an amount of concern, if not confusion, developed in the cases ? A part of this is undoubtedly occasioned by differences in the governing law; thus cases under the New York statute cited above would hardly be safe authorities under the federal law. But the main reason, I believe, lies elsewhere and, in fact, is not hard to discern. It seems to be found in all cases of attempts to enforce moral precepts which to a large part of the community seem strange and excessively puritanical. The analogy of the Prohibition Amendment is close. Since the law seems harsh, a search most diligent is made to cut down its more drastic operation; in fact, the mind seems to. revolt at enforcement of its 'harsher elements. That, I think, is the real meaning. If people want to waste their time in listening to radio programs in the hope or off-chance of winning some valuable prizes, why not let them do it. That is a widespread attitude, with which, of course, I have considerable sympathy. But I think we should draw the line when it goes so far as to make a joke of an existing law, to turn an understandable, if unliked, prohibition into one which is unintelligible. After all, the fate of the Prohibition Amendment shows the proper eventual remedy.

My brothers do not collect cases, nor shall I. It is a barren task in this problem. For courts and writers have found or created confusion and doubt, and it does little good to catalogue this. Moreover, as stated, many precedents concern differing legal situations. I shall content myself with a few authorities I consider most apposite. First I cite Maughs v. Porter, 157 Va. 415, 161 S.E. 242, the case of a lottery found in attendance at a real estate auction sale where an automobile was to be given away to a person present, not only because it is a leading case, but also because of the friends and enemies it has made. Thus it has been approved in the persuasive case, cited earlier, of State v. Wilson, 109 Vt. 349, 196 A. 757, holding a theater “bank night” scheme a lottery. Attempts to answer the court’s analysis have produced fresh difficulties, forcing one commentator to the extreme, found indeed in several of the opposing cases, of requiring a monetary or a pecuniary consideration, 18 Va.L.Rev. 465, while another, trying to avoid going so far, says that the consideration while present was not “of economic value” — a masterpiece of unreality, particularly as applied here. 80 U. of Pa.L.Rev. 744. Another writer quoted for the “a cent” proposition of note 5 of the opinion concludes some tendentiously critical remarks with this bromidic statement: “Perhaps the decision can be sustained on the ground that while people did not have to bid at the auction to be eligible to receive the automobile, it was reasonably probable that this would be the case.”(!) Pickett, Contests and the Lottery Laws, 45 Harv.L.Rev. 1196, 1206 n. 37. The requirement of a pecuniary consideration may perhaps be justified under some statutes. Surely, however, that is nowhere a requisite of the federal Act. Further explanation of the requirement of consideration to distinguish away a gift is found in such cases as Affiliated Enterprises v. Waller, 1 Terry 28, 40 Del. 28, 5, A.2d 257; Furst v. A. & G. Amusement Co., 128 N.J.L. 311, 25 A.2d 892; Glover v. Malloska, 238 Mich. 216, 213 N.M. 107, 52 A. L.R. 77; State v. Jones, 44 N.M. 623, 107 P.2d 324; Affiliated Enterprises v. Gantz, 10 Cir., 86 F.2d 597; Central States Theatre Corp. v. Patz, D.C.S.D.Iowa, 11 F. Supp. 566; State of Kansas ex rel. Beck v. Fox Kansas Theatre Co., 144 Kan. 687, 62 P.2d 929, 109 A.L.R. 698, with annotation at 709; State of Missouri ex rel. Mc-Kittrick v. Globe-Democrat Pub. Co., 341 Mb. 862, 110 S.W.2d 705, 113 A.L.R. 1104, with annotation at 1121. And not without some immediate point are the many decisions upholding F. T. C. orders against the use of lottery devices, such as punch boards, in the distribution of candy. Consolidated Mfg. Co. v. F. T. C., 4 Cir., 199 F.2d 417, .citing cases; Sweets Co. of America v. F. T. C., 2 Cir., 109 F.2d 296.

The reasoning and the cases cited seem to me rather compelling to sustain the Commission’s ruling. Were I more in doubt, I should feel some compunction to uphold the defendants’ position out of some deference to the respect due the decisions made by the agencies of government having the prime responsibility. But I do not think resort to that principle necessary. Nor do I find what I should regard as apt authority to the contrary. Perhaps I should make reference to Garden City Chamber of Commerce v. Wagner, D.C.E.D.N.Y., 100 F.Supp. 769, 772, for that involved a similar statute, 18 U. S.C. § 1302, covering the use of the mails for lottery. In that case the court said that “the consideration requisite to a lottery is a contribution in kind to the fund or property to be distributed.” This principle I think cannot be upheld and I understand the plaintiffs herein do not support it. And so further reflection has strengthened my belief in the validity of the position I took in dissent when the case came before us on application for a stay pending appeal, 2 Cir., 192 F.2d 240. Our consideration was not on the merits, but as the result of a brief hearing on our motion calendar. A motion for a stay of this ingenious scheme of local and neighborhood merchants for Christmas sales was obviously not very appealing; further, it required summary disposition in view of the pressure of time — it was submitted November 13 and decision was filed November 16, 1951; and denial of the stay, carrying the matter beyond the Christmas season, made the question moot for all practical purposes. The case cannot therefore be regarded as a definitive precedent disposing of the issue.

I think it therefore appropriate to reiterate by way of summary that my colleagues suggest no workable dividing line between what is “value” and what is not in deciding what the participants in these giveaway schemes have themselves given. On the contrary, they seem to me to have rejected the understandable tests to which persuasive precedents point. I fear, therefore, that our decision will serve to promote more confusion than it allays. For my part I would dismiss the plaintiffs’ complaints on the merits.

1 . Indeed, audiences are already becoming ' hardened to what were once considered fabulously high give-away bonanzas. See the following item in the N.X. Times, Dec. 28, 1952, Sunday Radio Section, p. X 11: “Hard Times. A doorman from A. B. C.’s Ritz Theatre stood at the corner of Broadway and Forty-cig'hth Street one morning last week with a handful of tickets. ‘Get your free tickets to “Break the Bank,” ’ he yelled, ‘the biggest money-paying show on the air. Offering 82,900.’ In ten minutes he unloaded just two tickets.”

2 . The statement “a cent is enough” quoted in the opinion from 45 Harv.B.Rev. 1106, 1206, appears to be borne out by the cases cited: People v. Runge, 3 N. Y.Cr.R. 85, 34 Hun 634; Glover v. Malloska, 238 Mich. 216, 213 N.W. 107, 52 A.L.R. 77, holding also that not all the participants need pay even the one cent which is currently the consideration; and Stewart v. State, 108 Tex.Cr.R. 661, 2 S.W.2d 440, holding also that the coin need not be current money of recognized value. So, too, services, such as selling a book, are sufficient. Loveland v. Bode, 214 Ill.App. 399.