No review of “must-carry” rule
UPDATED 4;27 p.m. with new detail, new cases.
The Supreme Court refused on Monday to reopen the issue of Congress’s power to order cable television systems to carry the programs of local broadcasters in their geographic areas. Without comment, the Court declined to hear Cablevisions Systems Corp. v. Federal Communications Commission (09-901). In essence, the cable TV industry was asking the Court to reconsider its rulings in 1994 and 1997 in the Turner Broadcasting cases, upholding the so-called “must carry” rule. The industry argued that competition has grown so much in the communications industry since the 1990s that local broadcasters no longer needed the “must carry” option in their broadcast areas, and thus it violates cable operators’ First Amendment rights to choose their own programming.
“The factual underpinnings [of the Turner Broadcasting rulings] have evaporated,” the Cablevisions petition argued. “Most importantly, the monopolistic nature of the cable industry that was key to the Court’s Turner decisions has been replaced by vibrant competition.” The FCC, in reply, contended that the realities of commercial life in local over-the-air TV broadcasting still justify the must-carry rule’s enforcement.
The Court granted review of only a single case, posing another test of when the one-year deadline for filing a federal habeas challenge is suspended because of ongoing proceedings in state court. The case, Wall v. Kholi (09-868), will be heard and decided next Term, starting Oct. 4. The issue of when that deadline is “tolled” (that is, interrupted) is a frequent one before the Court. In the new case, the question is whether a state prisoner’s plea to reduce his sentence is a form of state post-conviction review that qualifies to “toll” the one-year filing deadline. The issue arises in a Rhode Island case, in which the prisoner was seeking relief from two life prison sentences for molesting his two stepdaughters.
In another order, the Court asked the U.S. Solicitor General to offer the government’s views on whether the Federal Arbitration Act is a federal law that seeks to regulate insurance, and thus overrides any conflicting state law on insurance regulation. That question tests whether the FAA is subject to the McCarran-Ferguson Act of 1945, which barred a federal takeover of insurance regulation. The new case is Louisiana Safety Association Fund v. Lloyd’s Underwriters (09-945). There is no deadline for the government’s response. After it is filed, the Court will then decide whether to hear the case.
In denying the Cablevision challenge to the cable TV “must-carry” rule, the Court’s order noted that Justice Sonia Sotomayor did not take part. She is a former Second Circuit Court judge; the Cablevision petition was challenging a ruling by that Circuit Court, although she did not take part in that ruling. The Court’s membership has changed significantly since the Turner Broadcasting decisions. Justice Anthony M. Kennedy wrote both of those opinions. Justice John Paul Stevens joined his opinion in 1994, but Justices Ruth Bader Ginsburg, Antonin Scalia and Clarence Thomas dissented. In the 1997 decision, Justice Stephen G. Breyer, along with Justice Stevens, joined the majority, while Justices Ginsburg, Scalia and Thomas again dissented.
Justice Sotomayor also did not take part as the Court denied review of a plea to clarify the federal laws that apply to the stock market trading practice of “short-selling” — that is, selling and buying securities to make a profit when a stock price goes down. The question raised in Electronic Trading Group v. Banc of America Securities (09-1059) was whether an antitrust lawsuit may be filed claiming price-fixing by the major brokerage houses that take part in “short-selling” transactions. That case, too, came from the Second Circuit, which ruled that the brokerage houses were immune to the antitrust challenge.
The Court took no action Monday on another significant business law case — Textron, Inc., et al., v. U.S. (09-750). The petition by the giant manufacturing firm Textron and subsidiaries are seeking a ruling to clarify when an attorney’s internal working papers are protected from forced disclosure in a lawsuit in federal court. The papers at issue in the case are tax liability documents prepared by an in-house Textron attorney, and demanded by the Internal Revenue Service during a routine audit of the company’s returns.