Courtrooms in the Cloud: The DOJ Calls and Raises at the 3rd Circuit

J.D. Obenberger

On Dec. 9, a three-judge panel of the 3rd U.S. Circuit Court of Appeals will hear oral argument from the parties and take a second look at the decision it rendered in May concerning the Free Speech Coalition’s constitutional attack against 18 U.S.C §§ 2257-2257A, the recordkeeping statutes for adult producers.

Very recently, the appellate panel has set a short-fuse schedule for 15-page briefs before that oral argument. A great deal more than Section 2257 potentially rides on its eventual decision and possible, eventual Supreme Court review of these issues because the government has raised the stakes by bringing into issue all of the leading Supreme Court jurisprudence that empowers American government, from cities and villages and counties to states — and the federal government itself — to differentially regulate adult businesses in general.

The entire adult industry, from bookstores and magazines, from gentlemen’s clubs to online programs, needs to watch this one closely because the potential consequences on adult regulation at every level are enormous.

In other words, all of the legal principles that are commonly used to zone adult brick and mortar businesses into often remote, industrial areas, to limit their hours of operation, and to regulate how they do business differently from the ways in which non-adult businesses are regulated have been placed on the table by the Department of Justice. An entire structure of adult regulation during the past 50 years now stands in the balance.

It’s doubtful that it serves much purpose here to recount in any detail the history of the Section 2257 lawsuit brought by the FSC in Philadelphia beyond noting that since 2009, this case has percolated through the federal court system with prior visits to the 3rd Circuit and remands by it back to the federal district court in Philadelphia.

On May 14, the 3rd Circuit rendered a decision upholding the constitutionality of the Section 2257 record creation and retention system against the FSC’s First Amendment arguments, determining that mandatory administrative inspections under criminal penalties were unconstitutional searches, but remanding the case to the trial court for further consideration of the requirement in Section75.5(c)(1) of the implementing regulations that a producer must stand ready to produce his or her records for inspection at least 20 hours per week, presumably to comply with a subpoena, or face five years in prison.

But then, barely a month later, on June 18, the United States Supreme Court determined a seemingly unconnected case originating out of Arizona dealing with a small, itinerant church and the power of a local government to treat its signs announcing the location of Sunday services differently than other kinds of signs, political, “expressive”, commercial, or otherwise.

The surprising result in Reed v. Town of Gilbert was that by differentiating between the kinds of messages contained on the face of signs, and by treating them differently with respect to size, the permissible places where they might be posted, and the lawful duration of that posting, the Town of Gilbert had enacted what the law calls a “content based” restriction on speech — with profound consequences.

The Supreme Court said that because an inspector or clerk had to read the sign in order to determine what set of regulations applied, that was enough to establish that the law was content-based! It particularly and emphatically rejected all government argument that the Town’s purposes were benign and without intent to persecute or harm the church in question. That just wasn’t relevant to the High Court.

This is a development in the law that seems comparable to an earthquake. For a long time, it’s been the law that content-neutral laws, like those that generally control sound amplification of outdoor music and the like, are subject to a generous test for their legitimacy when they are challenged in court. Laws that regulate in a content neutral fashion are held to be valid if the regulation is supported by a “valid and substantial” governmental interest, (not a “compelling” one); that the regulation is not enacted to suppress the expression; and that reasonable or ample alternative avenues of communication are available.

Laws that are content-based restrictions on speech are evaluated far more rigorously by courts; for these laws to survive a court challenge, the government must prove that it is narrowly tailored to further a compelling governmental interest. Perhaps most critically, content-based restrictions on speech are presumed to unconstitutional and it is the lawmaker who has the burden of justifying the law under the appropriate test, a significantly tougher job lies before the government in strict scrutiny. It is therefore critical whether a court decides that a law is content-based or content-neutral.

The many licensing, zoning, hours of operation, and separation provisions which have been enacted since 1960’s and which have survived judicial attack, have survived because the courts have taken such laws to be content-neutral (or have treated them as such), and have applied the weaker test to sustain them. The leading case in this area from the Supreme Court has been Renton, arising from the regulation of adult motion picture theaters in that Washington community.

The legal justification that was used to support this doctrine was that it was not the expression that was the target of regulation, but only its “secondary effects” such as a decline in nearby property values, an increase in crime, and the like, which, in truth, may say more about why the adult businesses were able to rent only in already-depressed areas than about adult businesses as a cause of bad neighborhoods.

Many legal thinkers, and at least one Supreme Court justice, have questioned the honesty of this approach because the disparate legal treatment really arises purely from the erotic nature of the expression without any government need to prove likely adverse consequences in any case.

In light of Reed, the DOJ is now trying to bootstrap its Section 2257 arguments to the legal fiction adopted in Renton. In turn, the FSC questions whether Renton survives the recent holding in Reed, and even if it does, whether a case whose holding has mainly been applied to licensing and zoning can be applied to (arguably) control the means and methods of expression itself.

Until Reed, strict scrutiny generally arose only when the intent of the regulators was likely to have been averse to the expression. A “good” intent, such as one protecting property values through a mandatory spatial separation between adult businesses, frequently saved the law under the lower standard, and courts did not usually see their role as one to second-guess the wisdom or appropriateness of the town council decision.

Reed seems to have changed the landscape entirely. And that change in landscape does affect the future of all of the many laws at every level that aim to regulate the conduct of different kinds of adult businesses. The Supreme Court, in Reed, noted that the common sense meaning of the phrase “content based” requires a court to consider whether a regulation of speech “on its face” draws distinctions based on the message a speaker conveys. Section 2257 seems, inescapably, to do that by its absorption of definitions of what is “sexually explicit” expression.

The attorneys representing the FSC quickly moved for reconsideration because, though throughout the long history of this litigation, they had asked the courts to apply most strict scrutiny, the 3rd Circuit had determined to treat Section 2257 as a law that was not content-based, treating it as a content-neutral regulation, and accordingly applying a lower and lesser standard to determine its constitutionality. In fact, because its onerous obligations apply only to producers of certain kinds of expression, i.e. the sexually explicit, and do not affect any other kind of producer, it is hard to avoid the conclusion that it really is content-based.

The clean approach of Reed invites its application to all laws that treat expression differently because of factors that are determined only by examining the expression. Of course, the view of the FSC is that Section 2257 cannot survive strict scrutiny because, though the protection of children is a “compelling purpose” of government, this law is not narrowly tailored to achieve that, and in fact its strictures are irrelevant to the suppression of CP. That is another issue, perhaps for another day.

The government lukewarmly opposed reconsideration with a myriad of arguments, some quite creative. Though it has never argued the holding in Renton throughout the years of litigation in Philadelphia about Section 2257, it does so now, and apparently to argue that even if Section 2257 might be considered as a content-based regulation of speech under Reed, it nevertheless falls into a category in which the Supreme Court has expressly permitted the lower “intermediate scrutiny” approved in Renton. And if not exactly Renton, then something damn close with the same result. The DOJ attorneys, paid by our taxes, are presently arguing that the 3rd Circuit is not free, even after Reed, to effectively overturn Renton, a reversal which is solely the prerogative of the Supreme Court.

But by this argument, those DOJ lawyers have now set the issue of whether Renton and its numerous progeny can survive Reed — and have done so on the quick path to Supreme Court review. The DOJ is not moved by the fact that Renton is not mentioned or even cited as authoritative by the majority in Reed. (Its omission seems glaring to me.)

In fact, the Supreme Court might have determined Reed differently, against the Church, by citing Renton and determining that the Gilbert ordinance was purely aimed at secondary effects arising from obnoxiously sized and placed signs and not arising from content at all. But no, instead they said that good motives didn’t matter if the law, on its face, distinguished because of content. That’s miles away from Renton and the cases it begot. The DOJ argues that no legal speech is actually suppressed by Section 2257, though this is of no significance in Reed. The DOJ suggests that the 3rd Circuit should more expressly adopt the reasoning of Renton in its final determination on reconsideration.

This reconsideration will also look at an alternative support for the Third Circuit’s determination to invalidate the mandatory inspection provision, support arising from a recent Supreme Court case, Patel, invalidating a Los Angeles law that permitted The Authorities the right to inspect hotel and motel registration records on demand. At least theoretically, the FSC puts its 3rd Circuit victory on this issue also in jeopardy in any reconsideration, but the odds are strong that Patel will only enhance its victory here.

DOJ has called the bet and have raised with all of their legal assets in this part of the law, putting all of it at risk. The entire adult industry, from bookstores and magazines, from gentlemen’s clubs to online programs, needs to watch this one closely because the potential consequences on adult regulation at every level are enormous.

This article is written to generally inform the public and does not provide legal advice nor does it establish an attorney-client relationship. If you have a legal issue or question, contact a lawyer. If you are arrested, make no statement and contact a lawyer immediately.

Joe Obenberger is a Chicago Loop lawyer concentrating in the law of free expression and liberty under the U.S. Constitution, and his firm, J.D Obenberger and Associates, has represented many owners, employees, and customers of adult-oriented businesses, both online and in the real world. He can be reached in the office at (312) 558-6420. His e-mail address is obiwan@xxxlaw.net.

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