Playboy Enterprises, Inc. v. Public Service Commission of Puerto RicoPlayboy Enterprises, Inc. v. Public Service Commission of Puerto Rico
This is an appeal from a declaratory judgment and injunction entered by the district court. We borrow considerably from Judge Pieras’ thorough opinion, published at
I. Introduction
These facts are undisputed: Cable operating companies, after securing monopoly franchises from local authorities, provide the channels and hardware over which cable programming is transmitted. In order to encourage programming diversity, which might otherwise be stifled by the cable operator’s monopoly, the Cable Communications Policy Act of 1984, Pub.L. No. 98-549, 98 Stat. 2780,
Puerto Rican law criminalizes the transmission or retransmission of obscene programming over cable television.
In late March, 1987, defendant Angel E. Rosa, a prosecutor of Puerto Rico’s Department of Justice, notified individual cable operating companies around the Commonwealth that he was preparing to file criminal obscenity charges against them for transmitting the Playboy Channel over their systems. By July, all cable operators except Teleponce, Inc., had stopped transmitting the Playboy Channel.
Playboy Enterprises, Inc. (PEI), through a wholly-owned subsidiary, distributes the Playboy Channel to cable operating companies. The Puerto Rico Cable Television Association (the Cable Association) is an unincorporated trade association representing a group of Puerto Rican cable operating companies. Both sued the defendants under
(a) imposing any administrative sanctions against cable operator members of the Cable Association based upon any transmissions of the Playboy Channel, except that the Commission remained free to enact and enforce new regulations, consistent with the Constitution, concerning obscene cable transmission (leaving the Cable Association members a thirty-day window to challenge the regulations in court before they are enforced against them);
(b) threatening to prosecute members of the Cable Association for any programming carried on the Playboy Channel, or taking any adverse actions against the members in reprisal for the exercise of their First Amendment rights;
(c) prosecuting or sanctioning in any way members of the Cable Association or any other person or entity fоr past programming on the Playboy Channel;
(d) interfering with any programming carried on the Playboy Channel by intimidating or putting coercive pressure on members of the Cable Association.
The order left the Secretary of Justice free to prosecute
PEI
for obscenity based on its distribution of the Playboy Channel, and free to prosecute cable operators for
future
transmissions of the Playboy Channel.
In an opinion and order dated October 31, 1988, Judge Pieras declared that one member of the Cable Association, the operating company Teleponce, Inc., carries the Playboy Channel on a channel obtained by PEI pursuant to
The defendants do not challenge the district court's bedrock legal holding: that
The plaintiffs state that the district court had subject matter jurisdiction under
The defendants label the plaintiffs’ suit an inapproрriate attempt “to use the declaratory judgment mechanism as a defensive preemptive strike,” citing, among other cases,
Public Serv. Comm’n v. Wycoff Co.,
Where the complaint in an action for declaratory judgment seeks in essence to assert a defense to an impending or threatened state court action, it is the character of the threatened action, and not the defense, which will determine whether there is federal-question jurisdiction in the District Court. If the cause of action, which the declaratory defendant threatens to assert, does not itself involve a claim under federal law, it is doubtful if a federal court may entertain an action for a declaratory judgment establishing a defense to that claim. This is dubious even though the declaratory complaint sets forth a claim of federal right, if that right is in reality in the nature of a defense to a threatened cause of action. Federal courts will not seize litigations frоm state courts merely because one, normally a defendant, goes to federal court to begin his federal-law defense before the state court begins the case under state law.
The plaintiffs presently are seeking declaratory and injunctive relief based on their claim that
Without explaining exactly why, the Supreme Court has recognized a relevant limitation to the application of the rule stated in Wycoff. In an action by a group of airlines for declaratory and injunctive relief against New York State officials claiming that ERISA preempted the New York Human Rights Law and Disability Benefits Law, the Court acknowledged the existence of federal question jurisdiction:
It is beyond dispute that federal courts have jurisdiction over suits to enjoin state officials from interfering with federal rights. See Ex parte Young,209 U.S. 123 , 160-162 [28 S.Ct. 441 , 454-55,52 L.Ed. 714 ] (1908). A plaintiff who seeks injunctive relief from state regulation, on the ground that such regulation is pre-empted by a federal statute which, by virtue of the Supremacy Clause of the Constitution, must prevail, thus presents a federal question which the federal courts have jurisdiction under28 U.S.C. § 1331 to resolve.
Shaw v. Delta Air Lines, Inc.,
In two recent cases, this court has distinguished
Shaw
and applied the
Wycoff ra\Q.
The plaintiff in the first, after having been sued in state court for state common law trade name infringement, brought a federal court aсtion against its state court adversary, seeking a declaration and injunction, claiming that its rights under federal trademark law protected it from state law liability.
Colonial Penn Group,
Colonial Penn is not challenging a state regulatory system on the grounds that it is preempted by a parallel yet conflicting federal body of law. Penn is merely asserting that it has a federally protected mark that protects it against state common law infringement liability.... Jurisdiction over actions for declarations of pre-emption can logically only be asserted where a state official is the defendant.
In
Nashoba Communications,
above, the defendant in the declaratory judgment action
was
a state actor — the Town of Dan-vers, which had granted Nashoba Communications a cable television franchise, and had demonstrated its intent to enforce a two-year “rate freeze” clause in its license agreement with the cable company. Nash-oba Communications claimed that the Cable Communications Policy Act’s provisions regarding rates preempted the license’s “rate freeze” clause. However, since the Town was only claiming a right arising out of contract, rather than enforcing a regulatory scheme, the court held that
Shaw
did not apply.
The
Wycoff
rule applies distinctions “involving perhaps more history than logic.”
Franchise Tax Board,
Additionally, although the plaintiffs have dropped their claims which rely explicitly on the First Amendment, we draw some comfort in our distinctions of
Colonial Penn Group
and
Nashoba Communications
from the willingness of federal courts, including the Supreme Court, to entertain declaratory and injunctive actions against prospective enforcement of state law which threatens to discourage expression.
See, e.g., Steffel v. Thompson,
III. The Availability of a Federal Cause of Action
The defendants, without adequately segregating them, raise two analytically distinct arguments. They question whether there is a federal cause of action, either under
The district court found that the Cable Act implies a private cause of action under the four-part analysis of
Cort v. Ash,
The Supreme Court has recognized two narrow exceptions to the general availability of § 1988 to remedy the deprivation, by state actors, of federal rights. First, there is no “right” enforceable under the statute if the substаntive federal provision merely “express[es] a congressional preference for certain kinds of treatment,” rather than imposes binding obligations on the states, or if the asserted federal interest is so “vague and amorphous” that it is “beyond the competence of the judiciary to enforce.”
Golden State Transit Corp.,
We have no doubt the protection from liability provided cable operators by
The defendаnts point out that the statutory immunity derives its preempting force through the Supremacy Clause, and that the Supremacy Clause
itself
does not provide a substantive federal right enforceable under
We are also unconvinced by the defendants’ argument that resort to
The sum of these remedial provisions hardly creates a “comprehensive remedial scheme” leaving “no room for additional private remedies under
In
Sea Clammers,
the injunctions available to private parties, and the available agency enforcement powers, worked to protect the same federal right the plaintiffs seeking damages wanted to vindicate.
IV. Standing
The defendants argue that neither the Cable Association nor PEI has standing to bring this suit. Their separate challenges to the two plaintiffs’ standing share the same core: whether a cable programmer or an association of cable operators can properly bring suit based on what the defendants consider to be аn individual right of the cable operators.
A. The Cable Association
The district court held that because the Cable Association alleged no injury to itself caused by the defendants, it did not have standing to sue on its own behalf.
[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.
First, the defendants note that this suit no longer contains a challenge to the constitutionality of Puerto Rico’s obscenity statute; only the statutory preemption claim remains. The defendants then argue that Teleponce is the only member of the Cable Association claiming to have designated a channel for commercial use under
We think the defendants’ assertion that, because other members have not yet designated a leased access channel they lack standing, confuses merits and standing. Certainly, the members of the Association who have dropped transmission of the Playboy Channel on account of threats of prosecution have suffered an injury directly traceable to the defendants’ actions,
see Valley Forge College v. Americans United,
Next, the defendants claim that in reality, the Cable Association is just an ‘‘empty husk of an association with no public identity” which is controlled by PEI for its own interests, not the interests of the members. The record does not support this accusation.
A more difficult question is posed by the third prerequisite for an association to sue on behalf of its members: that “neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” The defendants argue that because this lawsuit requires the participation of Teleponce, the Association lacks standing.
We can easily find that the plaintiffs’ request for
declaratory
relief — that the Cable Act prevents local prosecution of cable operators for programing transmitted over leased access channels — does not require any individual member’s participation as a party. Such declaratory relief turns on a question of law which is not particular to each member of the Association, and because the declaration applies equally to all members of the Association, there is no need for individual proof or participation.
Brock,
A different part of the claim asserted does depend upon proof which may vary from member to member, however. The complaint asked the district court to
enjoin
the defendant from prosecuting or threatening to prosecute “cable operators” generally. This claim is now solely based upon the immunity from prosecution found in
But just because a claim may require proof specific to individual members of an association does not mean the members are required to participate as parties in the lawsuit. In Warth, the Supreme Court held that an association had no standing to sue on behalf of its members, when seeking monetary relief to compensate its members’ injuries. The Court said
whatever injury may have been suffered is peculiar to the individual member concerned, and both the fact and extent of injury would require individualized proof. Thus, to obtain relief in damages, each member of Home Builders [Association] who claims injury as a result of respondents’ practices must be a party to the suit, and Home Builders has no standing to claim damages on his behalf.
We see no reason why the claim for injunctive relief in this case requires the participation of any Cable Association member, or how Teleponce’s participation as a party would make any significant difference. No monetary judgment was granted, either on behalf of the Cable Association or its members. 10 The defendants do not claim that because Teleponce is not a plaintiff, they have been unable to gain access to evidence concerning the single individual issue, whether or not Teleponce has designated for commercial use the channel over which it transmits the Playboy Channel. The defendants, in fact, agreed to submit the case for decision on summary judgment without claiming there was a genuine issue of fact, only contesting the evidence the court could consider in resolving this issue. Therefore, we hold that the district court did not err in finding that Cable Association has standing to bring this suit on behalf of its members.
B. PEI
PEI faces a different standing test from the Cable Association, since it does not claim to be suing on behalf of the cable operators. To have standing, PEI must first satisfy what faces all parties bringing suit in federal court — Article Ill’s limitation of federal court jurisdiction to the resolution of "Cases” or "Controversies.” PEI must show (1) an actual or threatened injury suffered as a result of the putatively illegal conduct of the defendants, (2) that its injury "fairly can be traced to the challenged action,” and (3) that this injury is likely to find redress in a favorable decision.
Valley Forge College,
The defendants’ brief does not challenge PEI’s standing under Article III, except perhaps with an oblique statement which might be read to question whether the remedy sought will benefit PEI: the defendants claim “the Playboy plaintiffs would not derive any direct benefit from [this] action, since
What the defendants
do
challenge at length is what they characterize as PEI’s basing a suit entirely on the legal right of a third person. This invokes the prudential, discretionary limit federal courts have imposed on their exercise of Article III powers — the rule against
jus tertii
standing. A plaintiff generally must assert its own legal rights, without resting its claim for relief on the rights of third parties.
Secretary of State of Md. v. J.H. Munson Co.,
PEI, as did the district court, relies on
Bantam Books, Inc. v. Sullivan,
Bantam Books alone cannot support PEI’s claim of standing. The Supreme Court plainly stated that the publishers in Bantam Books were asserting their own first amendment rights, not the distributors’:
“[Ajppellants are not in the position of mere proxies arguing another’s constitutional rights. The constitutional guarantee of freedom of the press embraces the circulation of books as well as their publication, and the direct and obviously intended result of the Commission’s activities was to curtail the circulation in Rhode Island of books published by the appellants.”
Id. (citations omitted). At this point in its suit, PEI is not asserting the first amendment rights of anyone. PEI does not claim, although perhaps it could, that threats to prosecute a cable operator under an obscenity statute which is effectively preempted by federal law violates its own first amendment rights. Its claim for relief now depends entirely upon the immunity from prosecution provided by the Cable Act. The defendants argue that this immunity is personal to the cable operator, and does not and is not intended to benefit the cable programmer.
The rule against
jus tertii
standing is not absolute. The Supreme Court has recognized the ability of plaintiffs to raise the rights of others in many cases. “[TJhere are situations where competing considerations outweigh any prudential rationale against third-party standing, and ... this Court has relaxed the prudential-standing limitation when such concerns are present.”
J.H. Munson Co.,
Where practical obstacles prevent a party from asserting rights on behalf of itself, for example, the Court has recognized the doctrine of jus tertii standing. In such a situation, the Court considers whether the third party has sufficient injury-in-fact to satisfy the Art. Ill case- or-controversy requirement, and whether, as a prudential matter, the third pаrty can reasonably be expected properly to frame the issues and present them with the necessary adversarial zeal. See, e.g., Craig v. Boren,429 U.S. 190 , 193-194 [97 S.Ct. 451 , 454-55,50 L.Ed.2d 397 ] (1976).
J.H. Munson Co.,
First, there is a unique, reciprocal relationship between the cable operator’s statutory immunity, upon which PEI bases its suit, and PEI’s own statutory right to mandatory access. Narrowly viewed, of course,
Second, the plaintiffs’ complaint alleges that cable operators will drop their carriage of the Playboy Channel rather than defend an obscenity prosecution.
J.H. Munson Co.
recognized that when the individuals who are engaging in allegedly protected activity are reluctant to raise their own rights in the face of threatened official sanctions, this presents a practical obstacle which permits third party standing.
We see no reason to think that PEI is not an effective advocate of the cable operator’s rights. Unlike the plaintiff in
Friedman v. Harold,
Finally, although the defendants do not make an issue of it, we note that the Cable Act does provide a cause of action in favor of persons aggrieved by the failure or refusal of a cable operator to make channel capacity available according to
At this point, the question of standing and the previously considered question of the availability of
In summary, then, because the threat to the cable оperator’s immunity posed by local prosecution also threatens PEI’s statutory right of access, and because PEI has alleged a reluctance on the part of the operators to defend their rights based on their statutory immunity, PEI has standing to raise the cable operator’s immunity. 13
V. The Evidence of an Oral Designation Pursuant to
In support of their motion for summary judgment, the plaintiffs submitted to the district court a statement of facts they claimed were not in dispute. In it, the plaintiffs claimed that in April of 1987, Teleponce received from PEI’s counsel an oral request for commercial access to the channel over which the Playboy Channel was being transmitted pursuant to
The defendants argue on appeal that the district court erred in concluding on summary judgment that Teleponce transmits the Playboy Channel over a channel obtained under
When one party has properly supported a motion for summary judgment, the opposing party must “set forth specific facts showing that there is a genuine issue for trial.”
Anderson v. Liberty Lobby Inc., 477
U.S. 242, 248,
We may assume that in a proper case, an opponent of summary judgment can show a genuine issue of material fact without introducing evidence in direct contradiction to a fact presented by the movant, but by showing the existence of specific facts which would give a reasonable jury cause to disbelieve assertions supporting the movant’s version.
See
J. Moore and J. Wicker, 6A
Moore’s Federal Practice
56.-15[4] at 56-298-99 (1988); C. Wright, A. Miller, M. Kane, 10A
Federal Practice & Procedure
§ 2726 (1990 Supp.).
Cf. Nat. Union Fire Ins. Co., Etc. v. Argonaut Ins. Co.,
We need not, however, decide defendants’ present challenge to the credibility of the assertions of oral modification presented by plaintiffs, because they made no such point before the district court. The defendants objected to the district court’s reliance on the assertions of an oral modification only on the ground that they would be inadmissible at trial as hearsay. They have not pressed this argument on appeal, but instead raise a different one not presented to the district court. Issues not raised before the trial court are waived on appeal,
Cookish v. Cunningham,
Even if the defendants had not waived this issue by failing to raise it before Judge Pieras, they waived it by raising it too late on appeal. The defendants only got around to challenging the credibility of the plaintiffs’ affirmations in their reply brief. An appellant waives any issue which it does not adequately raise in its initial brief, because in “preparing briefs and arguments, an appellee is entitled to rely on the content of an appellant’s brief for the scope of the issues appealed.”
Pignons S.A. de Mecanique v. Polaroid Corp.,
VI. The Breadth of the Injunction
Ruling for the plaintiffs, Judge Pi-eras entered a declaratory judgment which stated that Teleponce carries the Playboy Channel over a leased access channel, and that prosecution of it, and of other members of the Association who might later designate channels pursuant to
VII. Conclusion
The district court had federal question jurisdiction over plaintiffs’
Notes
. All references to provisions of the Cable Act are as codified in Title 47 of the United States Code.
.
Nothing in [the Cable Act] shall be deemed to affect the criminal or civil liability of cable programmers or cable operators pursuant to the Federal, State, or local law of libel, slander, obscenity, incitement, invasions of privacy, false or misleading advertising, or under similar laws, except that cable operators shall not incur any such liability for any program carried on any channel designated for public, educational, governmental use or on any other channel obtained undersection 532 of this title or under similar arrangements.
.PEI’s wholly-owned subsidiary, the Playboy Programming Distribution Company of America, was added as a plaintiff by amendment. As no one has suggested any difference in their
. The district court also held that the Puerto Rican obscenity statute and the Commission’s Agreement Number 2 are not facially unconstitutional, although this claim had been dismissed by order dated August 31, 1987. Neither PEI nor the Cable Association challenges this holding, so we do not consider it on appeal.
.
Our
jurisdiction to hear this appeal is not questioned, and seems proper. Along with declaratory and injunctive relief, the plaintiffs asked for damages. The presence of unresolved legal claims raises the question whether the district court's order of October 31, 1988 is final and appealable under
. The preemption works as follows: section 556(c) of the Cable Act says that (with one exception) any state or local law "inconsistent with this chapter shall be deemed to be preempted and superseded.”
. Merely because an injunction as well as declaration of rights is sought does not distinguish this case from
Wycoff.
This court has held that when the injunctive relief sought in reality does no more than effectuate the declaratory judgment by preventing the application of state law, the
Wycoff
rule still applies.
Colonial Penn Group,
.
Every person who, under color of any statute, ordinance, regulation, custom, оr usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress....
Relying in part on
Calero-Toledo v. Pearson Yacht Leasing Co.,
. The Supreme Court has noted in dictum that it has also asked, when deciding whether a
. The plaintiffs' damage claims have been held in abeyance, and are not before us. We express no opinion on the Association’s standing to pursue these claims on behalf of itself or its members.
. Of course, PEI has no right of access to transmit obscenity, and the Cable Act expressly retains and provides for liability for programmers who transmit obscenity.
.
Any person aggrieved by the failure or refusal of a cable operator to make channel capacity available for use pursuant to this section may bring an action in the district court of the United States for the judicial district in which the cable system is located to compel that such capacity be made available. If the court finds that the channel capacity sought by such person has not been made available in accordance with this section, or finds that the price, terms, or conditions established by the cable operator are unreasonable, the court may order such system to make available to such person the channel capacity sought, and further determine the appropriate price, terms or conditions for such use consistent with subsection (c) of this section, and may award actual damages if it deems such relief appropriate. In any such action, the court shall not cоnsider any price, term, or condition established between an operator and an affiliate for comparable services.
. A question could be raised whether this case even presents a third party standing issue. Prosecution of cable operators in spite of the immunity created by