No. 95-1514 In the Supreme Court of the United States OCTOBER TERM, 1995 CALIFORNIA, ET AL., PETITIONERS v. FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE RESPONDENTS IN OPPOSITION DREW S. DAYS,III Solicitor General Department of Justice Washington, D.C. 20530 (202)514-2217 WILLIAM E. KENNARD General Counsel DANIEL M. ARMSTRONG Associate General Counsel JOHN E. INGLE Deputy Associate General Counsel JOHN P. STERN Counsel Federal Communications Commission Washington, D.C. 20554 ---------------------------------------- Page Break ---------------------------------------- QUESTIONS PRESENTED 1. Whether the Federal Communications Commis- sion's preemption of a California rule governing cal1- ing number identification (caller ID) service for non- published telephone subscribers effects an impermis- sible intrusion upon the prerogatives of the State. 2. Whether the Commission's preemption of the California rule violates the privacy and free speech rights of California telephone subscribers. (I) ---------------------------------------- Page Break ---------------------------------------- TABLE OF CONTENTS Page Opinion below . . . . 1 Jurisdiction . . . . 1 Statement . . . . 1 Argument . . . . 6 Conclusion . . . . 11 TABLE OF AUTHORITIES Cases: Air Transport Ass'n v. Public Utils. Comm'n of California, 833 F.2d 200(9th Cir. 1987), cert. denied, 487 U.S. 1236 (1988) . . . . 7 California v. FCC, 39 F.3d 919(9th Cir.1994), cert. denied, 115 S. Ct. 1427 (1995) . . . . 7 City of New York v. FCC, 486 U. S. 57(1988) . . . . 6, 7 Illinois Bell Tel. Co. v. FCC, 883 F.2d 104(D.C. Cir. 1989) . . . . 7 Louisiana Public Service Comm'n v. FCC, 476 U.S. 355 (1986) . . . . 5, 6 North Carolina Utils. Comm'n v. FCC, 552 F.2d 1036 (4th Cir.), cert. denied, 434 U.S. 874 (1977) . . . . 8 Ohio Domestic Violence Network v. Public Utils. Comm'n of Ohio, 638 N.E. 2d 1012 (Ohio 1994) . . . . 9-10 Saldana v. State, 846 P.2d 604(Wyo. 1993) . . . . 10 Smith v. Maryland, 442 U.S. 735 (1979) . . . . 9 Southern Bell Telephone & Telegraph Co. Y. Hamm, 409 S.E.2d 775 (S.C. 1991) . . . . 10 Constitution: U.S. Const: Amend. I . . . . 5 Amend IV . . . . 9 Miscellaneous: Rules and Policies Regarding Calling Number Identification Service, Notice of Proposed Rule- making, 6 FCC Rcd 6752 (1991) . . . . 2 (III) ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1995 No. 95-1514 CALIFORNIA, ET AL., PETITIONERS v. FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE RESPONDENTS IN OPPOSITION OPINION BELOW The opinion of the court of appeals (Pet. App. Al- A32) is reported at 75 F.3d 1350. JURISDICTION The judgment of the court of appeals was entered on January 31, 1996. The petition for a writ of certiorari was filed on April 19, 1996. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATEMENT 1. Calling number identification (caller ID) service permits a telephone customer who receives a call to see; with the aid of a display device attached to or incorporated into its telephone, the telephone number (1) ---------------------------------------- Page Break ---------------------------------------- 2 of the person who placed the call, Caller ID service is made possible by the refinement of techniques for the transmission of the calling party number (CPN) dur- ing the setup of calls, both local and long-distance.' In a rulemaking proceeding to develop rules and policies for the implementation of caller ID and related ser- vices nationwide, the Federal Communications Com- mission (FCC or Commission) adopted the orders at issue in this case. In those orders, the Commission, inter alia, established procedures by which telephone subscribers may choose not to have their CPN trans- mitted to the parties they call. Those procedures, which seek to balance the often conflicting privacy interests of called and calling parties, generally favor the transmission of CPN in the absence of a deliber- ate and conscious choice by the calling party not to have its CPN transmitted. 2. ___________________(footnotes) 1 Those refinements in the transmission of CPN permit a wide variety of benefits to consumers in addition to caller ID service. For example, businesses can significantly expedite customers' orders or inquiries via computer programs that instantly retrieve the caller's name, address, and billing information. Customer calls to national business or non-profit centers can be transferred immediately to the local branch office most convenient to the caller. Ambulances can be dispatched more quickIy. In general, the public can benefit from a variety of CPN-based services that allow individuals to obtain information and transact business more quickly and accurately. See Pet. App. A39. 2 The Commission in its notice of proposed rulemaking initiating the caller ID proceeding identified privacy interests of both the called, party and the calling party and announced its intention to balance those interests in formulating a fed- eral policy or rule. See Rules and Policies Regarding Calling Number Identification Service, Notice of Proposed Rule- making, 6 FCC Red 6752, 6755-6757 (1991). ---------------------------------------- Page Break ---------------------------------------- 3 Because CPN information automatically enters the telephone network during the call setup process, a choice by the calling party not to have its CPN revealed to the called party requires some method of blocking the CPN before it can reach the called party's display device. "Per call blocking," which pre- supposes that CPN will be transmitted as a general rule, allows a calling party to block disclosure of its CPN on any particular call by dialing certain num- bers (*67) before placing the call. "Per line blocking," by contrast, presupposes that as a general rule CPN will not be disclosed. Under that system, disclosure of a calling party's CPN is blocked on all calls from its telephone line unless the caller dials certain numbers (*82) to countermand the blocking before placing an individual call. See Pet. App. A57-A66. As an accommodation to States that had adopted per line blocking procedures for intrastate calls, the FCC's policy permits customers to choose either per call blocking or per line blocking so long as the methods for overriding per line blocking are uniform? The narrow dispute in this case concerns the form of blocking that applies, as a "default" mechanism, when subscribers to telephone service with unpub- lished numbers have not chosen either per call block- ___________________(footnotes) 3 Existing technology does not permit per line blocking for intrastate calls and per call blocking for interstate calls on the same line. The Commission at first considered preempting any state regulation that would have permitted per line blocking. On further consideration, the Commission decided to accommo- date the per line blocking policies that a number of States had adopted, as long as the carriers offering per line blocking also offered callers a means of unblocking the passage of CPN on individual calls by dialing a set of numbers that would be uniform nationwide. See Pet. App. A87, A132-A135. ---------------------------------------- Page Break ---------------------------------------- 4 ing or per line blocking. The FCC's rules and policies for interstate caller ID require that CPN should be transmitted unless the calling party has made an affirmative choice to block it, either by selecting per line blocking or by dialing the appropriate prefatory numbers to block transmission of CPN on an individ- ual call. That FCC policy choice can be effectuated only if per call blocking is used as the default mecha- nism for subscribers who have not chosen either of the two options. California's rules governing intrastate offerings of caller ID employ a contrary default policy for a nar- row category of subscribers. Under California's rules, customers with unpublished numbers who do not choose a method of blocking would be given per line blocking. The Commission in this case pre- empted California's default blocking rule for unpub- lished numbers to avoid frustration of its own federal policies for interstate caller ID and the balance those policies had achieved among the competing privacy interests of calling and called parties. See Pet. App. A135-A144. California challenged the Commission's preemption order by filing a petition for review in the United States Court of Appeals for the Ninth Circuit. 4. ___________________(footnotes) 4 Caller ID is not yet available in California, although it is offered in some form in 47 States and the District of Columbia. The dispute over customer education programs and blocking procedures between California and the carriers Offering telephone service in that State has delayed the implementation of this valuable service both as an intrastate service in California and as a `part of the interstate service offered elsewhere under the FCC'S ruIes and policies. Pet. APP. A137- A138 (quoted at Pet. App. A19-A20). ---------------------------------------- Page Break ---------------------------------------- 5 2. The court of appeals denied the petition for review. Pet. App, A1-A32. The court first held that the Commission had not impermissible intruded upon the State's authority in preempting the California regulation. The court pointed out that the FCC had "narrowly tailored" its preemption to fit federal policies, and that it had exercised its discretion reasonably by considering relevant factors and by referring to support in the record. Id. at A21. The court recognized that, while the FCC is generally precluded from regulating intrastate communica- tions, see id. at A17-A18, an exception to that general rule permits preemption of state law "where it is `not possible to separate the interstate and intrastate components of the asserted FCC regulation;" id. at A18 (quoting Louisiana Public Service Comm`n v. FCC, 476 U.S. 355,375 n.4 (1986)). On the basis of the Commission's uncontested determination that it was infeasible to establish different blocking schemes for interstate and intrastate calls that originate from the same line, see Pet. App. A14 & n.11, the court con- cluded that the FCC'S preemption of California law fit within that "impossibility exception: id. at A21. The court of appeals also rejected petitioners' con- tention that the Commission's preemption order vio- lated the privacy and free speech rights of California telephone subscribers. The court held that a calling party's telephone number "is not among the select privacy interests protected by a federal constitutional right to privacy." Pet. App. A23. Relying on deci- sions of this Court and three state supreme courts, the court of appeals concluded that the FCC's pre- emption rule "does not violate any cognizable privacy interest." Id. at A24. The court held that the FCC's rule does not violate a First Amendment "right not to ---------------------------------------- Page Break ---------------------------------------- 6 speak" because it does not require callers to express adherence to an unacceptable point of view. Id. at A24-A25. The court also concluded that the FCC'S rule "does not compel disclosure of the identity of a person who exercises his or her freedom of expres- sion" and thus does not violate any constitutional "right to speak anonymously." Id. at A26. ARGUMENT The decision of the court of appeals is correct and does not conflict with any decision of this Court or of any other court. Nor is the issue one of recurring importance; to the contrary, petitioners themselves assert (Pet. 9) that "the Court is unlikely to see these issues again under any circumstances" because "California is the only state in the country to have adopted a per line blocking default for nonpublished customers." Further review is not warranted. 1. Petitioners first contend (Pet. 10-13) that the Commission's preemption of California law effects an impermissible intrusion on the sovereignty of the State. Relying on well-established precedent with respect to telephone regulation, the court of appeals recognized that the FCC is empowered to preempt. state law where the interstate and intrastate aspects of the Commission's regulatory scheme cannot be separated. Pet. App. A18 (citing Louisiana Public Service Comm'n v, FCC, 476 U.S. 355, 375 n.4 (1986)). Cf. City of New York v. FCC, 486 U.S. 57 (1988) (upholding FCC preemption of technical standard for the transmission of cable television signals). The courts of appeals have applied that rule consistent y, upholding FCC preemption of state regulations where valid federal interstate regulations cannot coexist with state regulations that purport to address only ---------------------------------------- Page Break ---------------------------------------- 7 intrastate matters. See, e.g., Illinois Bell Tel. Co. v. FCC, 883 F.2d 104, 113-116 (D.C. Cir.. 1989); California v. FCC, 39- F.3d 919, 931-933 (9th Cir. 1994), cert. denied, 115 S. Ct. 1427 (1995). The Com- mission explained in the order under review that "it is not feasible to have different [caller ID] default policies for interstate and intrastate calls." Pet. App. A136; see id. at A125. Petitioners have not contested that determination either in this Court or in the court of appeals. See Pet. 12; Pet. App. A14 n.11. There is consequently no merit to petitioners' con- tention that the FCC's preemption of California law transgresses principles of state sovereignty. See id. at A21; City of New York v. FCC, 486 U.S. at 63-64.5 ___________________(footnotes) 5 Petitioners' contention (Pet. 10) that the FCC "ignored principles of federalism" is particularly ill-founded in light of the fact that the Commission narrowly tailored its preemption decision to accommodate the regulations established by the 47 other States that have implemented caller ID and various CPN- blocking regimes, and acquiesced in all but one of California's own rules. See Pet. App. A21 (noting that "the FCC substan- tially narrowed the scope of its preemption order" in its order upon reconsideration, and concluding that "[t]he FCC's pre- emption order satisfies the requirement that a preemption rule should be narrowly tailored to fit federal policies"). There is no basis for petitioners' suggestion (Pet. 10-11) that the court of appeals' decision conflicts with the Ninth Circuit's prior holding in Air Transport Ass `n v. Public Utils. Comm'n of California, 833 F.2d 200 (1987), cert. denied, 487 U.S. 1236 (1988). The court of appeals in that case held that a California statute requiring telephone carriers to discontinue service to customers found to have violated a state rule prohibiting call monitoring was not preempted by a provision of the Com- munications Act prohibiting discriminatory discontinuation of service. The case did not present any question concerning the FCC's authority to preempt a state rule that the Commission determines will undermine the federal regulatory scheme. ---------------------------------------- Page Break ---------------------------------------- 8 Petitioners also contend that preemption of state law is inappropriate. here because the federal inter- ests that would be threatened by California's default rule are "de minimis." Pet. 12. The Commission de- termined, however, that California's unique default policy would undermine two valid federal objectives: 1) fostering the availability of caller ID and other CPN-based services on interstate calls to and from California, and 2) promoting consumer choice as reflected in the Commission's carefully considered balance of the interests of the calling party in retaining the option to block CPN and the interests of the called party in receiving CPN absent the exercise of the caller's option. On the first point, the FCC cited record evidence suggesting that California's default policy was preventing deployment of caller ID and related services in California, thereby depriving all residents of and recipients of calls from that State of the benefits associated with the service. Pet. App. A136.6 As to the second point, the FCC "determined that as a matter of federal policy, the called party should have access to incoming CPN unless the calling part y has exercised his right not to have his ___________________(footnotes) 6 The court of appeals pointed out that some form of caller ID service was available in 47 States and the District of Colum- bia, but not in California. Pet. App. All. Petitioners' conten- tion (Pet. 11) that 93 percent of all calls made in California are intrastate provides no support for their contention that the impact of the California default rule upon federal policy would be de minimis. See North Carolina Utils. Comm'n v. FCC, 552 F.2d 1036 (4th Cir.), cert. denied, 434 U.S. 874 (1977) (fact that telephone terminal equipment was used 97 percent of time for intrastate calls did not deprive FCC of authority to pre- empt state regulation that would defeat valid federal regula- tory purpose). ---------------------------------------- Page Break ---------------------------------------- 9 CPN revealed," Id. at A139. California's default policy would upset that balance, depriving the called party of the benefits of caller ID even though the calling party had made no affirmative choice to block transmission of its CPN. The court of appeals con- sidered the Commission's proffered justifications, see id. at Al9-A21, and upheld its preemption regulation, observing that "[t]he FCC's preemption order satis- fies the requirement that a preemption rule should be narrowly tailored to fit federal policies," id. at A21. That holding was correct and does not warrant this Court's review. 2. There is also no merit to petitioners' contention (Pet. 13-18) that the FCC's preemption order violates the constitutional privacy and free speech rights of California nonpublished subscribers? The court of appeals correctly recognized that "[a] phone number is not among the select privacy interests protected by a federal constitutional right to privacy." Pet. App. A23. The court relied in substantial measure (see id. at A23-A24) on this Court's holding in Smith v. Maryland, 442 U.S. 735 (1979), that an individual has no Fourth Amendment right to prevent the disclosure of telephone numbers dialed from his home telephone. Since the advent of caller ID, two state supreme courts have relied on Smith in ruling that there is no federal constitutional right to privacy offering pro- tection from disclosure of telephone numbers via . ___________________(footnotes) 7 Petitioners' argument presumably would suggest that the 47 other States (and the District of Columbia) in which caller ID is available (see Pet. App. 11) are similarly violating the Constitution, since "California is the only state in the country to have adopted a per line blocking default for nonpublished customers" (Pet. 9). ---------------------------------------- Page Break ---------------------------------------- 10 caller ID. See Ohio Domestic Violence Network v. Public Utils. Comm'n of Ohio, 638 N.E.2d 1012, 1019 (Ohio 1994); Southern Bell Telephone & Telegraph Co. v. Hamm, 409 S.E.2d 775 (S.C. 1991). Another state supreme court has held that no federal constitu- tional privacy right prevents disclosure of an unlisted telephone number. Saldana v. State, 846 P.2d 604, 611-612 (Wyo. 1993). Petitioners do not cite or discuss those state cases, nor do they identify any court that has reached a contrary result. Even if telephone subscribers possessed a constitu- tional right to prevent transmission of their tele- phone numbers to the parties they call, moreover, the FCC policy at issue here would not violate that right. Any caller can prevent disclosure of its telephone number via caller ID, either by choosing per line blocking or by dialing the appropriate prefatory num- bers to block transmission of its CPN on individual calls. Failure to utilize either of those options effects a waiver of any conceivable right to prevent dis- closure of CPN. ---------------------------------------- Page Break ---------------------------------------- 11 CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. DREW S. DAYS, III Solicitor General WILLIAM E. KENNARD General Counsel DANIEL M. ARMSTRONG Associate General Counsel JOHN E. INGLE Deputy Associate General Counsel JOHN P. STERN Counsel Federal Communications Commission APRIL 1996 ---------------------------------------- Page Break ----------------------------------------