Morro Bay law update, 2004


This was prepared for the 2004 Journalism Association of Community Colleges Faculty Retreat by Wayne Overbeck, a retired professor of communications at California State University, Fullerton and a former communications attorney. His media law textbook, Major Principles of Media Law (Wadsworth), is now in its 15th edition. The 16th edition is scheduled to be pub-lished in August, 2004. This is the 24th year he has presented a law update at the Morro Bay conference.

This report summarizes some of the notable new developments in communications law of 2003. Other legal questions of interest to those attending the Morro Bay conference will also be discussed during the Sunday morning law session. Richard Weinstock, a long-time practicing attorney, will join in this year's presentation, as he has three times before. 

Highlights this year include: several more U.S. Supreme Court decisions on First Amendment issues, two media--related California Supreme Court decisions, state and federal court decisions on the right to demonstrate on highway overpasses, changes in print and broadcast ownership rules and a federal appeals court decision upholding the First Amendment rights of a student newspaper--or the moment. 


During 2003 the Supreme Court decided several important cases involving First Amendment questions. The court also considered but later dismissed an appeal of a California Supreme Court decision on the right to sue a corporation for allegedly making false statements on a controversial issue. 

Corporate liability for issue advertising

The distinction between commercial speech and noncommercial corporate speech may have been blurred in a case the Supreme Court agreed to hear and then dismissed in 2003, Nike v. Kasky (123 S.Ct. 2554). In that case, Nike, a manufacturer of shoes and athletic apparel, responded to criticism of working conditions at its overseas factories by issuing press releases, letters to the editor and other corporate messages addressing the charges. 

Nike was sued by consumer activist Marc Kasky under California's false advertising law, disputing the truthfulness of the company's statements on this issue. A California appellate court held that Nike's statements were protected by the First Amendment and were not commercial speech. The California Supreme Court reversed that ruling and held that Nike's messages really were commercial speech because they were aimed in part at consumers who might buy more of the company's products if they believed the company's statements about working conditions in factories that make its products. In Kasky v. Nike Inc. (27 C.4th 939, 2002), a 4-3 majority of the state Supreme Court ruled that the company's statements were not entitled to First Amendment protection and were instead subject to the false advertising law, upholding Kasky's right to take his claims to trial. Justice Ming W. Chin protested in a dissenting opinion, saying that restricting only one side (Nike) in a public debate, while leaving Nike's critics free to say whatever they please, is manifestly unfair. "Handicapping one side in this important worldwide debate is both ill-considered and unconstitutional," Chin said. 

The U.S. Supreme Court took up the Nike case, received briefs and heard oral arguments, but then dismissed it on the final day of the 2002-2003 term, apparently because a majority of justices decided the case should go to trial before being considered by the U.S. Supreme Court. That led to a dissent by Justice Stephen G. Breyer, joined by Sandra Day O'Connor, arguing that even postponing a ruling on this case would have a chilling effect on the First Amendment rights of other corporations that wish to speak out on controversial issues. 

Avoiding a potentially costly and embarrassing trial that would have given additional publicity to Kasky's charges, Nike settled the case in late 2003. Nike agreed to pay $1.5 million to a workers'-rights group to monitor conditions in overseas factories. 

The settlement leaves the advertising industry uncertain about what First Amendment rights a company enjoys when it speaks out about controversial issues such as working conditions at its factories. 

"Hate speech" laws revisited

In 2003, the Supreme Court once again addressed the conflict between the First Amendment and legislative attempts to curb expressions of hate such as cross burning. 

As it had before, the court said cross burning is protected by the First Amendment, but not when the act is an attempt to intimidate someone rather than an expression of symbolic speech. In Virginia v. Black (123 S.Ct. 1536), the court reviewed Virginia's across-the-board ban on cross burning. The court upheld its use to prosecute those who burn a cross on a neighbor's property with the intent to intimidate those who live there--or the intent to intimidate anyone else. But a majority of the court also held that burning a cross in an open field at a political rally is protected by the First Amendment as symbolic speech unless the specific intent to intimidate can be proven. 

Writing for the court, Justice Sandra Day O'Connor said that the Ku Klux Klan's history of using burning crosses to intimidate African Americans, Jews and others justified Virginia's law against cross burning that is intended to intimidate someone. "Threats of violence are outside the First Amendment," she wrote, adding, "The burning cross often serves as a message of intimidation, designed to inspire in the victim a fear of bodily harm." She said this history justifies Virginia's decision (and that of many other states) to ban cross-burning as a "signal of impending violence." 

However, the court overturned the conviction of the lead defendant in the case, Barry Elton Black, a Klansman who led a Klan rally in an open field at a farm in Virginia. The court held that there was insufficient proof that this political rally, which featured an attack on "the blacks and Mexicans" by one speaker and an attack on former President Bill Clinton and his wife, Hillary Rodham Clinton, by another, was specifically intended to intimidate anyone. Instead, the court saw it as a form of protected symbolic speech. The rally concluded with the singing of a hymn, "Amazing Grace," and the symbolic burning of a 30-foot cross. 

On the other hand, the court said two other defendants who had burned a cross in an African-American neighbor's yard could be prosecuted for that. 

Justice O'Connor reconciled the new case with R.A.V. v. St. Paul (a 1992 case in which the court overturned a city ordinance that banned cross-burning as hate speech) by interpreting R.A.V. narrowly to protect only cross-burning as symbolic speech but not as an act intended to intimidate someone. 

"A ban on cross-burning carried out with the intent to intimidate is fully consistent with our holding in R.A.V. and is proscribable under the First Amendment," she explained. 

The 2003 decision led several justices to issue separate concurring or dissenting opinions. Perhaps most notable was Justice Clarence Thomas' opinion. Thomas, the high court's only African-American justice, said he would uphold the Virginia law and other anti-cross-burning laws in full. During earlier oral arguments in this case, Thomas had called cross-burning "a symbol of a reign of terror." In his separate opinion when the case was decided, he said cross-burning should never be regarded as symbolic speech protected by the First Amendment. 

"Just as one cannot burn down someone's house to make a political point and then seek refuge in the First Amendment, those who hate cannot terrorize and intimidate to make their point," he wrote. 

On the other hand, Justices David H. Souter, Ruth Bader Ginsburg and Anthony M. Kennedy said they believe there is a First Amendment right to engage in cross burning as symbolic speech. They said they would not uphold any law forbidding it. In an opinion joined by Ginsburg and Kennedy, Souter said any ban on cross burning is a "content-based" ban on a symbolic message and could not survive First Amendment scrutiny. 

One irony in Virginia v. Black is that Virginia rewrote its cross-burning law after a lower court invalidated the version of the law under review by the Supreme Court. The new law requires proof of specific intent to intimidate and would probably be upheld in full under the Supreme Court majority's rationale. 

Abortion protests as organized crime?

The Supreme Court also curbed some legal actions against anti-abortion activists in 2003. Ruling in Scheidler v. National Organization for Women (537 U.S. 393), the court held that the federal Racketeer Influenced and Corrupt Organizations (RICO) Act cannot ordinarily be used by abortion providers to win treble damages and nationwide injunctions against abortion foes. 

Those who demonstrate near clinics that perform abortions can still be sued under the Freedom of Access to Clinic Entrances (FACE) Act. However, that law lacks a treble damage provision and requires abortion foes to be sued state by state. 

The high court ruled by an 8-1 vote that abortion protesters, even if they block clinic entrances with the ultimate goal of shutting down a clinic, are not normally guilty of the kind of "predicate offense" such as extortion that is required to bring a case under RICO. The decision effectively ends nearly 20 years of litigation by NOW and other abortion backers against the Pro-Life Action League and Operation Rescue, two anti-abortion groups, under RICO. 

Several other groups that have demonstrated for various causes, including People for the Ethical Treatment of Animals (PETA), supported the anti-abortion groups, fearing that they, too, could be sued under the treble damages provisions of RICO. 

Chief Justice William H. Rehnquist wrote the court's majority opinion, saying that the holding should not affect the usefulness of RICO as a weapon to fight organized crime. In a concurring opinion, Justice Ruth Bader Ginsburg, joined by Stephen G. Breyer, said RICO could have also been used against civil rights demonstrators during the 1960s under the broad reading of RICO urged by abortion supporters. 

Internet filtering and the First Amendment

The Supreme Court in 2003 upheld the Children's Internet Protection Act, enacted in 2000. That law directed the Federal Communications Commission to adopt new rules under which libraries and schools would be required to install internet filtering software to be eligible for federal aid for internet access. 

After the FCC complied with this Congressional mandate, the American Library Association and civil liberties groups joined in a lawsuit challenging this new law. They contended that it violates the First Amendment by denying students and library patrons access to many non-obscene websites, including some that aren't even adult-oriented in their content. 

In a widely anticipated decision, the U.S. Supreme Court upheld the law, ruling that it does not violate the First Amendment for Congress to impose conditions such as internet filtering on grants awarded to libraries and schools (U.S. v. American Library Assn., 539 U.S. 194). 

Writing for the court's 6-3 majority, Chief Justice William H. Rehnquist called the filtering requirement "a valid exercise of Congress' spending power." He also said, "Congress has wide latitude to attach conditions to the receipt of federal assistance to further its policy objectives." 

One key to Rehnquist's conclusion was the fact that the law does not prevent librarians from disabling the filtering at the request of any adult. Libraries are also free to maintain separate, non-federally-funded computers that don't have the filtering software installed. 

Dissenting, Justice John Paul Stevens, joined by Ruth Bader Ginsburg and David H. Souter, said the law amounts to legislative overkill--"a statutory blunderbuss that mandates this vast amount of overblocking" of constitutionally protected material on the internet. 

The Supreme Court's 2003 decision reversed an earlier decision by a specially convened three-judge federal district court in Philadelphia that declared the filtering law unconstitutional. 


Affirming the libel statute of limitations

The California Supreme Court has strictly interpreted the state's one-year statute of limitations in a libel case, even though a plaintiff said she was unaware of the libel until several months after the publication of an allegedly libelous book. 

In Shively v. Bozanich (31 C.4th 1230), the high court dismissed a lawsuit by Jill Shively, who testified before a grand jury concerning the whereabouts of O.J. Simpson on the night of his ex-wife's murder in 1994. Shively was not called as a trial witness after she sold her story to "Hard Copy." She sued a deputy district attorney and others for a book that said she was not called as a witness mainly because she was a "felony probationer." However, Shively missed the one-year filing deadline by one day. She said the one-year period should run from the date she learned of the alleged libel, not from the date of publication. 

Writing for a unanimous court, Chief Justice Ronald M. George said the one-year period should run from "the date the book was first generally distributed to the public, regardless of the date on which plaintiff actually learned of the existence of the book..." George refused to apply the discovery rule, which sometimes allows plaintiffs to sue after the deadline if they could not have discovered a private libel earlier. 

The decision was a victory for media organizations that filed a brief urging the court to apply the statute of limitations literally instead of extending the discovery rule to cases involving the mass media. 

Satirical use of celebrities' public personas

The California Supreme Court in 2003 ruled on the extent to which a satirical publication may exploit the public persona of a celebrity without violating the right of privacy. In Winter v. DC Comics (30 C.4th 881), musicians Johnny and Edgar Winter sued DC Comics for a mini-series depicting the "Autumn" brothers as half-human and half-worm villains. The high court concluded that the fanciful caricatures at issue here had major transformative value, unlike artist Gary Saderup's depictions of the Three Stooges in an earlier case, Comedy III Productions Inc. v. Gary Saderup (25 C.4th 387). 

Writing for the court, Justice Ming Chin said, "Although the fictional characters Johnny and Edgar Autumn are less-than-subtle evocations of Johnny and Edgar Winter, the books do not depict plaintiffs (the Winter brothers) literally." 

Rejecting the Winter brothers' claim that their names were used to promote the comic book series, violating their right of publicity even if the depictions of them were allowable, Chin wrote: "Plaintiffs also argue... that the record contains evidence that defendants were trading on plaintiffs' likenesses and reputations to generate interest in the comic book series and increase sales. This, too, is irrelevant to whether the comic books are constitutionally protected. The question is whether the work is transformative, not how it is marketed." 

The right of publicity is one aspect of the larger right of privacy recognized under California law. It protects against the improper commercial exploitation of a person's name, voice or likeness. 


The post-Sept. 11, 2001 era produced a new round of litigation about expressive activities on government property, notably bridges and overpasses. The ninth circuit U.S. Court of Appeals held in 2003 that Caltrans officials had to allow antiwar banners to be placed on a Highway 17 overpass where American flags had been allowed near Santa Cruz. 

In Brown v. California Dept. of Transportation (321 F.3d 1217), the court noted that Caltrans had no policy banning public displays on overpasses. Activists posted signs shortly after 9/11 that said, "At what cost?" and "Are you buying this war?" The signs were quickly removed by police officers. Although Caltrans did not remove the banners, the agency argued that such signs required special permits for safety reasons. 

The federal appellate court unanimously held that the policy was not viewpoint neutral because flags had been allowed without permits. Writing for the court, Judge Kim Wardlaw said, "Because Caltrans' policy of allowing citizens to hang flags but not banners from highway overpasses is not required by state law, and the safety concerns apply to both flags and expressive banners, the policy is not reasonable." 

"The record is devoid of evidence that flags are less prone to falling or are generally fastened more securely than other banners," Wardlaw noted. 

The decision on antiwar banners was controversial because a California appellate court had upheld the action of California Highway Patrol officers who stopped anti-abortion activists from waving signs at motorists on a Highway 99 overpass near Sacramento. In Sanctity of Human Life v. California Highway Patrol (105 C.A.4th 858), the court ruled that the sign-waving was distracting to motorists, avoiding the question of viewpoint neutrality in the regulation of expressive activities on overpasses. 

Explaining the court's decision in the anti-abortion sign case, Justice George Nicholson wrote, "Here, the CHP's actions were not based on the content of the message, served (the) significant governmental interest of allowing traffic to flow freely on the freeways, and left open ample alternatives for plaintiffs to communicate their message in other forums." 


In 2003, the seventh circuit U.S. Court of Appeals ruled that the Supreme Court's Hazelwood v. Kuhlmeier decision (484 U.S. 260) does not apply at the college level--but then the court reconsidered that decision. 

In Hosty v. Carter (325 F.3d 945), the initial decision by a three-judge panel was withdrawn for en banc reconsideration (a review by all of the judges on the court). In January, 2004, an 11-judge panel heard oral arguments in the case. A final decision is expected later this spring. 

In this case, Patricia Carter, the dean of student affairs at Governors State University in Illinois, ordered the printer of the student newspaper, The Innovator, not to publish future issues until she had a chance to review and approve the copy. Margaret Hosty and other newspaper staffers sued, alleging that this prior administrative review violated the First Amendment. The student newspaper discontinued publication rather than submit to prior censorship. 

The seventh circuit court initally agreed, holding that the Hazelwood principle does not apply at the college level. Hazelwood declared that officially sponsored high school student newspapers are not usually protected from administrative censorship by the First Amendment. The seventh circuit court said the principle that college newspapers are protected by the First Amendment and do not fall under Hazelwood is so clear that Carter could be held personally liable and forced to pay damages for violating the students' First Amendment rights. 

In the earlier case of Kincaid v. Gibson (236 F.3d 342), another federal appellate court also held that Hazelwood does not apply at the college level. Many previous federal court decisions have upheld the First Amendment rights of collegiate journalists. However, Hosty gives the seventh circuit a chance to revisit that question, or at least to answer the narrower question of whether censorship-minded administrators can be held personally liable for their decisions. 


Few issues in communications law were as controversial in 2003 as the Federal Communications Commission's rewrite of its print/broadcast ownership rules. Congress eventually intervened, enacting a legislative compromise between the FCC and its critics. A federal court also intervened, halting implementation of the new rules pending an appeal. 

Ever since the early 1980s, the percentage of the nation's television households that any one company may reach has been restricted. Until 1996, the limit was 25 percent. The ceiling was raised to 35 percent by the 1996 Telecommunications Act. In 2002, a federal appellate court overturned the 35 percent ceiling, ordering the FCC to drop it or better justify it (Fox Television Stations v. FCC, 280 F.3d. 1027). (These limits always applied only to stations owned by a network or other media corporation. The calculation excludes affiliates that carry network programming but are independently owned). 

The FCC responded to the Fox decision in 2003 by voting 3-2 to raise the cap to 45 percent, provoking a national controversy that reflected the deep division within the FCC itself. Congress eventually overruled the FCC and set the limit at 39 percent, allowing the largest media corporations to keep all of the television stations they now own but not allowing them to acquire any more stations. 

All of these TV ownership limits have included a UHF discount provision: only half of the households in a metropolitan area are counted toward the limit if a company owns a UHF station rather than a VHF station there. (UHF is defined as channel 14 or higher.) Thus, under the 39 percent cap, one company could conceivably own stations that reach 78 percent of all television households if it owned only UHF stations. The rationale for this provision is that UHF stations have poorer coverage and draw smaller audiences. 

In 2003, the FCC also revised several of its other rules, including the television duopoly rule and restrictions on print-broadcast cross ownership, which generally prevented the owners of television stations from acquiring a newspaper in the same market, or vice versa. 

The duopoly rule allowed one company to own two television stations in the same market if there were eight competing "voices," which the FCC defined as television stations under eight different ownerships even after one company bought a second station. The same federal appellate court that overturned the television household ceiling also undermined the duopoly rule in a 2002 decision. Ruling in Sinclair Broadcast Group v. FCC (284 F.3d 148), the court rejected the FCC's justification for the duopoly rule. The court held that the definition of "voices" was arbitrary and capricious because it ignored other media outlets such as newspapers, radio stations and cable television. The FCC rewrote the duopoly rule in 2003 to allow one company to own up to three television stations in the largest markets and two television stations in many smaller markets. 

The FCC also eliminated several other rules, including a longtime ban on one company owning both radio and television stations in large markets. Although some longtime owners of both radio and television stations are exempt, this rule had been used to prevent some companies from acquiring both radio and television stations in the same market. The FCC has granted waivers of this rule from time to time, and the 1996 Telecommunications Act authorized the FCC to extend its existing waiver policy and grant waivers in the top 50 markets. 

In another controversial move, the FCC voted in 2003 to eliminate its long-standing newspaper-broadcast cross-ownership rule in all but the smallest markets. The FCC decreed that a company could own both a newspaper and a television station in any market that has four or more TV stations. 

Critics of these deregulatory moves by the FCC appealed to the third circuit U.S. Court of Appeals in Philadelphia, bypassing the U.S. Court of Appeals in Washington, D.C., which had previously rejected the FCC's ownership restrictions in the Fox and Sinclair cases. The third circuit ordered the FCC not to implement its new rules pending an appeal. In early 2004, the court heard oral arguments in the challenge to the FCC's new rules. However, the court dropped consideration of the television household ceiling because Congress had legislated a 39 percent cap by then. The court is expected to rule later this year, setting up a possible appeal to the Supreme Court. 


Twice in the last two years the ninth circuit U.S. Court of Appeals has rejected attempts by Mattel Inc. to prevent others from exploiting the Barbie doll name and image. 

In 2002, the court held that the song, "Barbie Girl," included in a 1997 album by the Danish band Aqua, does not infringe Mattel's trademark rights in the name, "Barbie," for dolls. The court cited the First Amendment in allowing this parody of a toy line that has become a cultural icon and said there was no danger of consumer confusion here (Mattel Inc. v. MCA Records, 296 F.3d 894). 

A year later, the same court rejected Mattel's attempt to penalize Utah artist Tom Forsythe for distributing his "Food Chain Barbie" photographs. Ruling in Mattel Inc. v. Walking Mountain Productions (353 F.3d 792), the court said that Forsythe's images, although distasteful to many, were a fair use and not a copyright or trademark infringement. The court said the photos were parodies of the Barbie image, carrying messages about consumerism and gender roles. The court noted that Forsythe earned only $3,659 from the photos (half of that coming from sales to Mattel's private investigators), and that Mattel had aggressively pursued artists and museums supporting Forsythe. The court also overturned a federal judge's refusal to award $1.6 million in attorney's fees to Forsythe's lawyers and ordered the judge to reconsider. 

Forsythe's collection of 78 images depicted kitchen appliances, among other things, with Barbie dolls that were often nude or in sexually suggestive poses.  Mattel alleged not only copyright and trademark infringement but also trademark dilution. The federal appeals court ruled against Mattel on all counts. 

"By developing and transforming associations with Mattel's Barbie doll, Forsythe has created the sort of social criticism and parodic speech protected by the First Amendment and promoted by the Copyright Act," Judge Harry Pregerson wrote for the court. 

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