After 3rd Hearing, 3rd Circuit Sends 2257 Case Back to Trial Judge

PHILADELPHIA, PA—In what is turning out ot be one of the longest cases in the history of adult entertainment, the Third Circuit U.S. Court of Appeals today issued its ruling in the second appeal of the case of Free Speech Coalition, et al v. Attorney General of the United States, better known in the adult industry as "the 2257 case." Most recently, after having heard argument in December 2015 on the further appeal of the decision by U.S. District Court Judge Michael M. Baylson, and in light of two important U.S. Supreme Court decisions—Reed v. Town of Gilbert and City of Los Angeles v. Patel—Circuit Judge D. Brooks Smith, writing for the Court, accepted the arguments put forth by Plaintiffs' attorneys J. Michael Murray and Lorraine R. Baumgardner that the Reed case, which involved an Arizona ordinance limiting street signs, requires the court to look at 2257 as a "content-based" restriction on speech requiring "strict scrutiny" by the trier of fact. At the same time, the Patel case, which involved warrantless checking of hotel registrations, cemented the concept that the inspection provisions of 2257 and its implementing regulations are unconstitutional under the Fourth Amendment's search and seizure restrictions. The beginning of Judge Smith's opinion (which will be referred to as "FSC IV"), in which Judge Anthony J. Scirica joins, recounts at length the history of the federal record-keeping and labeling law, 18 U.S.C. §2257, its requirements, the parties challenging it, the Third Circuit's rationales for its previous rulings in the case, and the subsequent appeals based on new Supreme Court rulings. Judge Smith then analyzed how Reed and Patel required both a rehearing by the appeals panel on the matter, noting that, as to Reed, "The Supreme Court reversed and ruled that the 'Sign Code is content based on its face,' because the restrictions 'depend entirely on the communicative content of the sign'," Judge Smith wrote. "Thus, strict scrutiny, not intermediate scrutiny, was the appropriate standard, as it was error to look to the purpose of the Sign Code in determining the level of scrutiny that should be applied. The Court instructed that '[a] law that is content based on its face is subject to strict scrutiny regardless of the government’s benign motive, content-neutral justification, or lack of "animus toward the ideas contained" in the regulated speech'." [Citations removed here and below] Hence, despite Congress' good intentions in creating 2257 as a bar against child pornography, the law's onerous requirements in fact restrict much legal adult speech, and as such, under Reed, must be looked at with "strict scrutiny," the most restrictive form of scrutiny of speech the courts can offer. In order to survive strict scrutiny, a law must serve a compelling government interest, be the least restrictive means by which to accomplish that purpose, and must be narrowly tailored to achieve that goal. As AVN has previously pointed out, 2257 by itself does nothing to prevent an underage performer from appearing in a sexually explicit production if that youngster has an authentic-looking (even if fake) government-issued photo ID. Judge Smith then analyzes why, in light of the Reed decision, the U.S. Department of Justice attorneys then attempted to fall back on the classic "time, place and manner" case, City of Renton v. Playtime Theatres, arguing that the so-called "secondary effects" of adult content required the additional barriers to it imposed by 2257. "While Reed explicitly proscribes such an inquiry into the purpose of a facially content-based statute ... we need not reach the issue of whether the secondary effects doctrine survives Reed because this is not a secondary effects case," Judge Smith declared. "We arrive at this conclusion by recognizing that, if the secondary effects doctrine survives, Reed counsels against expanding its application beyond the only context to which the Supreme Court has ever applied it: regulations affecting physical purveyors of adult sexually explicit content. "We note that the Supreme Court has considered and rejected the applicability of the secondary effects doctrine to cases not involving adult physical establishments," he added, noting such important adult-related cases such as United States v. Playboy Entertainment Group (regarding signal bleed of adult channels on cable TV systems) and Reno v. ACLU (regarding government attempts to ban "indecent" or offensive speech from the internet.) "We deem it significant that the Supreme Court has never actually applied the secondary effects doctrine outside the realm of brick-and-mortar purveyors of adult sexually explicit content. We decline to do so now, because any application of the secondary effects doctrine beyond what the Supreme Court has explicitly endorsed would bring this case into direct conflict with Reed’s pronouncement that we cannot look behind a facially content-based law to a benign motive in order to shield the law from the rigors of strict scrutiny." But the decision here is not all roses. "By remanding for an application of strict scrutiny we are not 'dooming' the Statutes as the [government] dissent suggests," Judge Smith warned. "Nothing in our analysis dictates a conclusion that the Statutes will not (or will) pass strict scrutiny. Recently, the Supreme Court, in a First Amendment challenge to Florida’s judicial conduct rules regarding campaign solicitations, held that the regulation at issue was 'one of the rare cases in which a speech restriction withstands strict scrutiny.' On remand, it is for the District Court to ascertain whether the Government has met its burden of showing that the 'proposed alternatives will not be as effective as the challenged [Statutes]'." "It's a magnificent opinion; it's a great victory at this point," said First Amendment attorney J. Michael Murray, who delivered the argument in the case. "The court agreed entirely with our position that this is a content-based statutory scheme and that strict scrutiny is required in terms of evaluating its constitutionality under the First Amendment, and it's been remanded to the district court to make that determination in the first instance, and we're very confident that we can present argument that these statues cannot possibly survive strict scrutiny." The panel then turned its attention to the Patel case, which the opinion describes as "a city ordinance that created an inspection regime with similarities to the one at issue here" and which the Supreme Court struck down "as facially unconstitutional because it did not provide the hotel operators an opportunity for precompliance review by a neutral arbiter. In doing so, the Court rejected the argument that the hotel industry was 'closely regulated,' such that there was no reasonable expectation of privacy, and held that, even if it was, warrantless searches in this context were unreasonable." The opinion then delves into why the Plaintiffs have standing to challenge the law's warrantless inspection regime, touching on the fact that inspections that can take place at a moment's notice and without warning can indeed be disruptive and harm a business. "A declaration that §75.5 [the section of the Federal Register containing 2257's implementing provisions] is unconstitutional and an injunction barring the Government from conducting searches in the manner currently prescribed would alleviate the costs associated with making records available for physical inspection twenty hours per week and remove the real threat of inspections described above," Judge Smith states. "In FSC III [the appeals court's previous decision], we addressed only the as-applied constitutionality of the regulations, and we found them to be unconstitutional as applied to Plaintiffs," Judge Smith continues. "However, given the similarity between the inspection provisions of the Statutes and the regulation at issue in Patel, we now hold that the inspection provisions of the Statutes and §75.5 are facially unconstitutional. The opinion goes on to explain why adult content production is not a "closely regulated industry", and also why the warrantless inspection regime is unreasonable in any case. "Here, the Government has all but admitted that warrantless searches are unnecessary," Judge Smith states. "As the District Court found, '[b]oth FBI agents testified that it was highly unlikely that a producer could assemble Section 2257 records' on short notice. And we agree with law enforcement’s testimony that the destruction of evidence is not a real concern, given that to do so would only compound any criminal violation of the Statutes. Further, law enforcement here conducted nearly one third of its inspections under the Statutes after providing notice and without any reports of fabrication. Thus, the record establishes that the type of records required to be maintained, given their scope as well as the need for indexing and cross-referencing, could not easily be recreated on short notice nor could violations be concealed." "The other thing that's extremely important about this opinion is that it expands the relief we obtained under the Fourth Amendment," Plaintiffs' attorney Murray analyzed. "You may recall that in their prior opinion, they struck down the regulation that authorized inspections, but they struck those regulations down 'as-applied' and did not reach the question of whether the statutory provisions themselves were unconstitutional. On rehearing, they've now agreed with us that not only is the regulation unconstituonal under the Fourth Amendment, but also those portions of the statute that require one to make records available to the Attorney General and make it a crime to refuse to permit the government to come in and inspect the records. The Third Circuit has now declared those statutory provisions as well as the regulation unconstitutional on its face—not just as-applied but facially unconstitutional under the Fourth Amendment, and that's an exciting development as well as a result of this opinion." However, the Third Circuit's opinion is not unanimous, with Judge Marjorie O. Rendell dissenting as to the majority's view that Renton's secondary effects doctrine does not apply here. "In declining to apply the doctrine here, the majority reasons that 'any application of [it] beyond what the Supreme Court has explicitly endorsed would bring this case into direct conflict with Reed’s pronouncement that we cannot look behind a facially content-based law to a benign motive in order to shield the law from the rigors of strict scrutiny'," Judge Rendell writes. "It therefore sends 18 U.S.C. §§ 2257 and 2257A to face strict scrutiny, likely dooming these laws that were enacted to reduce the criminal harm to minors that flows from child pornography. But rather than take this drastic step, I am of the view that we should apply the secondary effects doctrine—which has direct application here—and save these laws from unconstitutionality." [Emphasis added] Basically, Judge Rendell takes issue with the majority's view that Renton's allowance of restrictions based on secondary effects has been and should only apply to brick-and-mortar structures rather than in some philosophical sense. "Under the [Renton] doctrine, a facially content-based law will nonetheless be deemed content neutral and thus subject to intermediate scrutiny if it was enacted not to suppress protected speech but to reduce harmful secondary effects—such as crime—that are uniquely caused by or associated with the protected speech that is singled out by the law," Judge Rendell writes. Since the Supreme Court did not specifically strike down Renton's "secondary effects" doctrine in Reed—in fact, it didn't even mention it—as far as Judge Rendell is concerned, "We must therefore decide how to resolve this conflict between Supreme Court precedent applying the secondary effects doctrine and Reed’s sweeping rule that facially content-based laws must undergo strict scrutiny. Fortunately, the Supreme Court has given us guidance as to how to do so: it has instructed that '[i]f a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.'" Of course, the panel's majority is of the opinion that Renton and its progeny (which for Judge Rendell is the "some other line of decisions") has no specific application to sexually explicit content, and that therefore the Reed decision controls—a position with which she disagrees. "In my view, the secondary effects doctrine has direct application here," she categorically states. The Court over the years has applied the secondary effects analysis to laws involving a diverse range of subject matter. But it has actually found such effects almost exclusively in the context of facially content-based laws that affect sexually explicit speech. Indeed, the Court created the doctrine based on the premise that sexually explicit speech by its very nature can cause or correlate with societal harms such as crime and blight in a way that other kinds of protected speech typically cannot. "Furthermore, the Court has repeatedly articulated a related, but even more fundamental, reason as to why the doctrine and intermediate scrutiny should apply to laws affecting sexually explicit speech: this kind of speech, though protected, categorically deserves less protection than others kinds of protected speech," she adds. "That is because, simply put, sexually explicit speech is not as vital to our society as other kinds of protected speech." This, of course, is horseshit. Sexually explicit speech causes no societal harms, though its presence in some venues has inspired adverse reactions within the local community, and its widespread popularity should certainly put the lie to the idea that it is "not as vital to our society as other kinds of protected speech." Hence, it seems clear that Judge Rendell's attempt to shoehorn Renton into 2257 is not based on the Supreme Court's interpretation of Renton, but on her own prejudices regarding sexual speech. Nonetheless, Judge Rendell attempts to justify her rejection of sexual speech as requiring strict scrutiny as per Reed by stating, "the reason for the restrictions is based on a secondary effect of this protected speech, namely the criminal harm to children that flows from child pornography, a harm that is uniquely attributable, at least in some cases, to this speech," but as previously noted, 2257 by itself does nothing to prevent an underage person from performing in a XXX production, and if such an occurrence were to happen, the existing federal and state child pornography laws provide a more than adequate remedy. In the end, Judge Rendell believes that adult content laws such as 2257 only require intermediate scrutiny, though she's good with the majority's striking down the warrantless searches. As to the future of this case, Murray was somewhat optimistic. "It remains to be seen what the government's response will be," he told AVN. "They could file a petition for rehearing and rehearing en banc, I suppose; they could consider whether they want to seek review by the Supreme Court at this juncture, or they could just accept this and then we go back on remand and Judge Baylson will have to determine what procedure he would like to employ in order to carry out the Third Circuit's instruction for him to test the statutes under strict scrutiny. He could ask for additional evidence if the parties wanted to put on additonal evidence. I don't think he'd need to retry the entire case because much of the evidence is already in the record, which will be helpful in demonstrating, in our view, that the statutes can't survive strict scrutiny." The full Third Circuit opinion can be found here.