We emphasize that this is not an instance in which a change of law frustrates the parties' intent or renders adherence to a prior court order illegal or more onerous. The principal thrust of Time Warner's claim on the merits is the voluntary nature of the action which it proposes. We repeat that there is no special significance to the October 1st date which Time Warner has selected to commence scrambling. Indeed, as was discussed at oral argument, there are a number of significant problems arising by virtue of the selection of that date, including the fact that many of Time Warner's subscribers were away on vacation when the notice and reply cards were mailed. (Scrambling will occur, according to Time Warner's plans, whenever a card requesting continued unscrambled receipt of the programming is not returned. Thus, the consequence of not receiving and responding to the card is that scrambling occurs.)
Surely, the Court is aware of Time Warner's strong interest in demonstrating to those in government and elsewhere who have decried the availability of "indecent programming" on home cable sets, that it is doing all that it can do to address the problem. And it is clearly more convenient to point to the federal courts rather than elsewhere for the reason why more immediate action is not taken. Nevertheless, we find no basis for Time Warner to disregard unilaterally the terms of the agreement it itself sought and into which it entered.
At oral argument, counsel for Time Warner in essence sought for the first time to be relieved from the stipulation. In an affirmation of Stuart W. Gold, Esq., counsel for defendant dated September 19, 1995 and received in Chambers late in the afternoon that day, Time Warner applied to the Court to amend the 1990 Order. In the covering letter of Mr. Gold accompanying that affirmation, he states: "If the Court believes that defendant should submit a formal motion on notice on this issue, we are prepared to do so."
We decline to entertain the informal application to be relieved of the stipulation at this time and in this procedural context. If and when such application is formally made to the Court, consideration can be given, not under the self-imposed time pressures Time Warner has created, to the merits of such application, giving full weight to such factors as the underlying purposes of the stipulation, the imminence of Supreme Court action, and other relevant factors.
We turn now to the circumstance that the stipulation discussed above relates only to "Midnight Blue" and that Time Warner proposes to scramble all "indecent programming" including programs produced by entities not party to that stipulation. We were advised at oral argument that similarly worded stipulations were entered into with other program producers but they are not in the record in this case and the motion presently before the Court relies only on the single stipulation cited above.
We were also advised by counsel for Time Warner that if this Court were to grant the motion solely as to "Midnight Blue", it would broadcast that program unscrambled and would scramble all others. We find this to be an extremely difficult position for Time Warner to maintain.
First, Time Warner has often and vigorously cited "Midnight Blue" to be the prime example of outrageous indecent programming. See, e.g., Alliance for Community Media v. FCC, 56 F.3d at 117. To continue to carry this program unscrambled and to scramble other less indecent programs would be inequitable and confusing.
Second, Time Warner would be compelled to notify its subscribers that contrary to the previous announcement which had been mailed to them, this one, most "indecent," program would not be scrambled. Thus, all of the costs and alleged adverse consequences of a deviation from Time Warner's prior announcement would be present whether one program or all were transmitted in unscrambled fashion. And the need for parental monitoring, if any, of what programs children watch in the late hours of the night would continue to be required so long as "Midnight Blue" was carried unscrambled. In the September 19th affirmation of Mr. Gold, the problems of scrambling all indecent programming except "Midnight Blue" are further explicated:
Moreover, subscribers who do not want to receive plaintiff's indecent programming, including those who are parents, will have to use the locking device in their converter to program out Channel 35 during the hour on Saturday and the hour on Monday when "Midnight Blue" is cablecast. Since the converter locking mechanism only locks out the entire channel, and cannot be programmed to switch on or off by the hour, subscribers who want to watch other programming on Channel 35, but do not want to receive plaintiff's indecent programming, will have to continuously program and reprogram the converter.
For these reasons, we believe that all movants, not merely the producers of "Midnight Blue," should receive like treatment on this motion.
We next address the question whether movant has shown irreparable injury, and note Time Warner's contention that its proposed scrambling will not result in harm to the plaintiff because over 50,000 subscribers have requested unrestricted access to plaintiff's programming. As a consequence, Time Warner contends it is "highly unlikely that plaintiff will suffer any loss of viewers or advertising revenue as a result of implementation of the policy." Affirmation of Stuart W. Gold, Esq., para. 5. We think, for the purposes of this motion, plaintiff has demonstrated a sufficient potential for sustaining irreparable injury when it shows that its maximum audience would be diminished from 290,000 to 50,000.
Time Warner's claim that no such injury would result is predicated on the assumption that all of the 50,000 who returned the card would, in fact watch, and its judgments as to advertisers' positive response to an audience which has gone to the trouble of requesting that the programming be received. Plaintiffs have submitted an affidavit from an advertiser asserting that he would discontinue advertising if scrambling will occur. Declaration of Ben Levine, Sept. 14, 1995. We accord scant weight to this declaration. Mr. Levine is both an advertiser and a program producer. More importantly, we note that this controversy is not so much whether there will be scrambling of indecent programs but the terms and conditions upon which such scrambling will take place, and as to which subscribers the programs will be scrambled. But we believe that in the context of the free speech claims raised herein, plaintiffs have sustained their burden of showing both a likelihood of success on the merits and irreparable injury.
We have alerted the Clerk of the Court of Appeals to the fact that an emergency application may be made to that Court for appellate review of this determination.
We will hear the parties with respect to a bond at a hearing on September 20, 1995.
In sum, we conclude that Time Warner may not voluntarily scramble plaintiff's programs at this time because, among other reasons, Time Warner has previously committed itself not to alter its carrying of plaintiff's programs prior to events which have not yet transpired.
Dated: New York, New York
September 20, 1995
Leonard B. Sand