Why FCC v. Fox Television Stations, Inc., Fascinates an ERISA Lawyer

In FCC v. Fox Television Stations, Inc., and a companion case involving ABC, seven Justices ruled that decency standards promulgated by the Federal Communications Commission were so vague that their application to television programs broadcast by the respondents’ affiliates violated the Due Process Clause of the Fifth Amendment.  On that basis, the Court voided FCC orders finding that the respondents had violated 18 U.S.C. § 1464 (and imposing what I take to be a civil forfeiture of almost $1.25 million on ABC’s affiliates).  Justice Ginsburg concurred in the result on First Amendment grounds, and Justice Sotomayor did not participate in the consideration or decision in the case.  

Before the programs at issue in last week’s decision were broadcast, the FCC’s stated policy on enforcement of its decency regulations was not to treat “fleeting expletives” or “a brief shot of nudity” as actionably indecent.  However, in an order arising from the airing of an entirely different television program (the Golden Globe awards), the FCC enunciated a broader policy regarding what constitutes “actionable indecency.”  In essence, the FCC’s “Golden Globes” order announced a change in enforcement policy under which fleeting expletives or a brief shot of nudity might be treated as actionably indecent.  The FCC’s application of the policy announced in the Golden Globes order to programs broadcast before that order issued prompted Justice Kennedy to write for the Court

The Commission’s lack of notice to Fox and ABC that its interpretation had changed  . . . “fail[ed] to provide a person of ordinary intelligence fair notice of what is prohibited.” [United States v.] Williams, [553U.S.285, 304 (2008).]  This would be true with respect to a regulatory change this abrupt on any subject . . .

Of course, the respondents had notice long before their programs aired that the broadcast of non-fleeting expletives or of other-than-brief shots of nudity could have occasioned FCC action.  Thus, the respondents knew that the broadcast of expletives and the broadcast of shots of nudity were categories of conduct subject to FCC regulation.  This general awareness obviously was insufficient as notice satisfying due process, and in the passage quoted above, the Court’s opinion gives us to understand that this is so quite apart from any doctrine of prior restraint or chilling effect applicable only in the context of the First Amendment.

Thus, with only a little ascent up the ladder of generalization, the rule in FCC v. Fox Television might prohibit a substantive change in any regulation of conduct in a category known to the actor in advance to be subject to regulation if the change has adverse consequences for the regulated party, at least as applied to brief, episodic conduct all of which takes place before notice of the change.

But how might that rule apply to a regulatory change announced during conduct that by its nature takes place, if at all, only as a process and only over a prolonged period?  For example, how might  FCC v. Fox Television apply to rules governing the imposition of liability based on the accumulation by a multiemployer pension plan of an unfunded accrued pension benefit obligation over the course of a given employer’s participation in that plan?  Or, as practitioners in my field say, “What about withdrawal liability?”

In a subsequent post I will delve into the mechanics of “withdrawal liability” a bit more, but for now I will confine myself to saying that there is at least a possibility that FCC v. Fox Television may have implications for the imposition of this statutory assessment.  That is because there is at least some indication in the Court’s opinion that notice of the exposure to liability based on prolonged, non-episodic conduct is required before the actor takes the first step in the process constituting the conduct.

That indication springs from how the Court dealt with a mootness argument made on the agency’s behalf.  The FCC had argued that the case was moot with respect to Fox Television because it had not imposed forfeitures on Fox’s affiliates and would not take the facts that led to the finding of actionable indecency into account in any subsequent proceeding.  The Court rejected this argument at least in part because the FCC has statutory authority to take past conduct into account in subsequent proceedings.  Thus, the agency’s “policy of forbearance” did not render Fox Television’s action moot.

 Though the Commission claims it will not consider the prior indecent broadcasts “in any context,” it has the statutory power to take into account “any history of prior offenses” when setting the level of a forfeiture penalty. . .  Just as in the First Amendment context, the due process protection against vague regulations “does not leave [regulated parties] . . . at the mercy of noblesse oblige.”

In reading that passage, recall that the precise issue for purposes of the Due Process Clause hinged on the difference between the imposition of liability based on “fleeting expletives” and the imposition of liability based on “repeated expletives.”  Viewed in that light, the FCC’s power, as the Court describes it in this passage, is surely at least analogous to treating several “discrete” instances of broadcasting “fleeting expletives” during primetime as a single act of broadcasting “repeated expletives.”  (I admit that the analogy depends on supposing exaggeratedly long intervals of time demarcating each of the “repetitions” of the expletives, but given the state of the delegation doctrine, we must all admit that Congress left it to the FCC to come up with a methodology for telling apart several fleeting expletives from one long repetition of expletives.)   If that analogy holds, then, it would seem that liability cannot attach at the completion of a process known in advance to be subject to regulation unless notice of the potential for imposing that liability is given before the process begins.