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Fabulous Associates Inc. v. Pennsylvania Public Utility Commission

filed: February 16, 1990.

FABULOUS ASSOCIATES, INC.
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, ROBERT CASEY, GOVERNOR OF THE COMMONWEALTH OF PENNSYLVANIA, LEROY S. ZIMMERMAN, ATTORNEY GENERAL OF THE COMMONWEALTH OF PENNSYLVANIA, AND BELL TELEPHONE CO. OF PENNSYLVANIA; SAPPHIRE COMMUNICATIONS OF PENNSYLVANIA, INC. V. ROBERT P. CASEY, LEROY S. ZIMMERMAN, AND WILLIAM SHANE, INDIVIDUALLY AND IN THEIR OFFICIAL CAPACITIES, PENNSYLVANIA PUBLIC COMMISSION, GOVERNOR ROBERT P. CASEY, ATTORNEY GENERAL LEROY ZIMMERMAN AND CHAIRMAN OF THE PUBLIC UTILITY COMMISSION, WILLIAM SHANE, APPELLANTS



On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil Nos. 88-4178, 88-4276.

Sloviter, Greenberg, and Garth, Circuit Judges. Opinion of the Court, Sloviter, Circuit Judge.

Author: Sloviter

Opinion OF THE COURT SLOVITER, Circuit Judge.

A 1988 amendment to the Pennsylvania Public Utility Act requires, inter alia, that adults who wish to listen to sexually explicit recorded telephone messages apply for a nine-digit access code to receive such messages. The Act prohibits issuance of access codes to minors. Two companies that provide such recorded message services filed suit against the Pennsylvania Public Utility Commission, Robert Casey, Governor of the Commonwealth of Pennsylvania, and LeRoy S. Zimmerman, Pennsylvania's Attorney General, (jointly referred to as "Commonwealth")*fn1 for declaratory and injunctive relief to restrain the enforcement of the amendment. The district court held that the statute impermissibly burdened First Amendment rights and issued an injunction against its enforcement. The Commonwealth of Pennsylvania appealed. We notified the parties that the appeal would be held until the Supreme Court decided the then pending case of Sable Communications v. FCC, 492 U.S. 115, 109 S. Ct. 2829, 106 L. Ed. 2d 93 (1989), because its decision on issues raised in that case might have some bearing on those before us here. After the Court's opinion in Sable was announced, the parties filed supplemental briefs, and we are thus prepared to consider the merits of the matter before us.

I.

Facts

Plaintiffs, Fabulous Associates and Sapphire Communications of Pennsylvania, provide recorded messages with sexually explicit messages to Pennsylvania consumers. Plaintiffs do so through recorded audiotex telephone services that use an outgoing tape-recorded message on a multi-line telephone answering machine which allows a large number of callers to hear the same message simultaneously.

The Pennsylvania legislature, apparently in an effort to prevent minors from gaining access to phone services that provide sexually explicit messages, sought to regulate the transmission of such messages over the phone lines by passage of an amendment which added a new section, section 2905, to the Pennsylvania Public Utility Act. 66 Pa.Cons.Stat.Ann. § 2905 (Purdon Supp. 1989). Section 2905 regulates notice, access codes, dissemination to minors, telephone company duties, costs of service, blocking access, and enforcement. The plaintiffs challenged subsections (b), the access code provision, (c), the provision prohibiting dissemination to minors, and (d), the provision imposing duties on the telephone company.*fn2

Section 2905(a) requires that any provider of a charged message service must inform the caller that the cost will be charged to the customer's bill, that the charge will be itemized on the next bill, and, if applicable, that the message contains explicit sexual material. No charge can be made if the caller hangs up after the warning and before the message begins. This provision has not been challenged by plaintiffs, and its effect is undisturbed by the order of the district court.

Section 2905(b) provides that any person seeking to place a call to a telephone message service containing explicit sexual material must obtain an access code number or other identification number of not less than nine digits by submitting a written application to the telephone message service. The caller must present this number to the service after the warning message in order to complete the call. Section 2905(c) prohibits minors from obtaining access code numbers and requires the service to exercise all reasonable methods to ascertain that the applicant is not a minor.

Section 2905 must be read in conjunction with the Pennsylvania criminal law. Knowing distribution and utterance of obscene materials is prohibited. 18 Pa.Cons.Stat.Ann. § 5903(a) (Purdon 1984). Under the criminal code, material is obscene if "the average person applying contemporary community standards would find that the subject matter taken as a whole appeals to the prurient interest," "the subject matter depicts or describes in a patently offensive way, the sexual conduct," and "the subject matter, taken as a whole, lacks serious literary, artistic, political, educational or scientific value." 18 Pa.Cons.Stat.Ann. 5903(b). This is essentially a recitation of the Supreme Court's obscenity standard. See Miller v. California, 413 U.S. 15, 24, 37 L. Ed. 2d 419, 93 S. Ct. 2607 (1973). The Commonwealth does not contend that the material transmitted by either Fabulous or Sapphire is obscene as to adults.

Pennsylvania criminal law also flatly prohibits dissemination of "explicit sexual materials" to minors. 18 Pa.Cons.Stat.Ann. 5903(c). The term "explicit sexual materials" used in the Pennsylvania Public Utility Code is defined in the Pennsylvania criminal law to include obscene materials as well as:

(1) any picture, photograph, drawing, sculpture, motion picture film, or similar visual representation or image of a person or portion of the human body which depicts nudity, sexual conduct, or sadomasochistic abuse and which is harmful to minors; or

(2) any book, pamphlet, magazine, printed matter however reproduced, or sound recording which contains any matter enumerated in paragraph (1), or explicit and detailed verbal descriptions or narrative accounts of sexual excitement, sexual conduct, or sadomasochistic abuse and which, taken as a whole, is harmful to minors.

18 Pa.Cons.Stat.Ann. § 5903(c). The statute defines "harmful to minors" as a variation of the state's obscenity standard in terms of material suitable for minors.*fn3

Before the 1988 amendment to the Pennsylvania Public Utility Act embodied in section 2905 went into effect, Fabulous and Sapphire brought separate suits seeking to have it declared unconstitutional as violative of their First Amendment rights and seeking to enjoin its implementation. The nub of their complaint was that section 2905 would impose costs and/or restrictions on their business which would effectively put them out of business and that the requirement that consumers obtain access codes would unduly limit adult access to sexually explicit speech that was not obscene.*fn4

After a hearing in the suit brought by Fabulous and a denial of Fabulous' motion for a temporary restraining order, the two cases were consolidated and heard by the district court. At that time, the parties stipulated that the hearing on the preliminary injunction would be the final hearing. App. at 307. Thereafter, the district court declared that sections 2905(b), (c) and (d) were unconstitutionally overbroad to the extent they regulate messages merely sexually explicit or indecent as to adults and to the extent they impose obligations on providers of explicit sexual phone messages, ...


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