Monday, June 25, 2012

How the Supreme Court Protected Rupert Murdoch's Reputation

By Associate Professor Aaron Caplan

In an anti-climactic conclusion to a long-running free speech battle, the U.S. Supreme Court unanimously ruled in Fox Television Stations v. FCC (2012) that the federal government could not take action against a TV network for failing to bleep out "fleeting expletives" from excited celebrities during awards shows in 2002. It was not a free speech decision. Instead, the court found that the FCC violated due process by failing to give broadcasters fair warning, at the time of these broadcasts, that isolated profanity would violate decency regulations. As it happens, the FCC did provide such a warning in 2003, but last week's Supreme Court decision declined to rule on whether FCC actions against subsequent broadcasts would be a free speech problem.

A curiosity was hidden near the end of the opinion. One government argument was that the FCC could not have deprived Fox of an interest in liberty or property without due process of law, because the FCC never imposed a fine. Instead, it placed a document in its files stating that Fox had violated decency regulations and let it off with a warning. The Supreme Court concluded that this wrist slap from the FCC implicated a constitutionally protected interest, because the existence of a past violation might be the basis for a larger fine in the event of a future violation. Fair enough. But then the court gilded the lily:

In addition, when combined with the legal consequence described above, reputational injury provides further reason for granting relief to Fox. As respondent CBS points out, findings of wrongdoing can result in harm to a broadcaster's "reputation with viewers and advertisers." This observation is hardly surprising given that the challenged orders, which are contained in the permanent Commission record, describe in strongly disapproving terms the indecent material broadcast by Fox (noting the "explicit, graphic, vulgar, and shocking nature of Ms. Richie's comments") and Fox's efforts to protect children from being exposed to it (finding Fox had failed to exercise "reasonable judgment, responsibility, and sensitivity to the public's needs and tastes to avoid a patently offensive broadcast"). Commission sanctions on broadcasters for indecent material are widely publicized. The challenged orders could have an adverse impact on Fox's reputation that audiences and advertisers alike are entitled to take into account.

This passage will astound anyone familiar with the Fox network that broadcasts here on Planet Earth. Ever since it began producing its own prime time programming in the late 1980s, it has branded itself as the hip young network that is not afraid of the censors. Its earliest flagship shows were "The Simpsons" and "Married With Children," each of which generated scads of mainstream press debate about their suitability for family viewing. These were later joined by dramedies featuring scantily clad young people talking about their sex lives ("Melrose Place," "Ally McBeal") and satire shows that had no problem with the occasional fart joke ("In Living Color," "Family Guy"). An official FCC finding that the network airs celebrities saying naughty words will not hurt Fox's reputation with its chosen audience - it will be free publicity.

Legally, it is no surprise that a court's statements about the reputational impact of government actions are untainted by factual inquiry into actual reputations. As I have written previously, courts do not purport to define stigma with any rigor in constitutional cases. Most of the time, they know it when they see it, and then use it as a building block in larger arguments that would succeed or fail regardless of the appeal to reputation.

When constitutional opinions consider whether reputations have been harmed, courts typically consult their stomachs, not evidence. In Fox, there was no showing that the network had lost even a single viewer or advertiser as a result of the FCC ruling. The networks did not argue that it had happened, only that it might. The Supreme Court agreed that viewers would be "entitled to take [the FCC ruling] into account," which was harm enough for the tender reputation of a multinational broadcasting corporation. By contrast, Meese v. Keene, 481 U.S. 465 (1987), involved a federal statute that required an American film exhibitor to label Canadian documentaries about nuclear war and acid rain as "foreign political propaganda." According to the collective stomach of the unanimous Supreme Court, reasonable viewers will not view the label as pejorative. Justice Thomas's stomach tells him that race-conscious affirmative action plans stigmatize their beneficiaries. See Grutter v. Bollinger, 539 U.S. 306, 373 (2003) (Thomas, J., dissenting). Meanwhile, the "stigma-plus" rule of Paul v. Davis, 424 U.S. 693 (1976) says that the due process clause is not implicated in cases involving actual provable injury to reputation, unless it is accompanied by some other alteration of legal status (no matter what that other injury may be).

Even though the Supreme Court's peculiar paragraph about Fox's reputation is irrelevant to the result, it may have at least one beneficiary. The reputation of Rupert Murdoch, founder and chief shareholder of Fox, needs all the help it can get these days.

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