F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
MAR 23 1998
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
SUNDANCE ASSOCIATES, INC., a Colorado corporation,
Plaintiff-Appellee,
v. No. 96-1501
JANET RENO, Attorney General of the United States, in her
official capacity only; UNITED STATES DEPARTMENT
OF JUSTICE,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 95-N-2592)
Arthur M. Schwartz (Michael W. Gross, Cindy D. Schwartz, and Gary M. Kramer,
with him on the brief) of Arthur M. Schwartz, P.C., Denver, Colorado, for
Plaintiff-Appellee.
Anne M. Lobell (Jacob M. Lewis with her on the briefs), United States
Department of Justice, Washington, D.C., for Defendants-Appellants.
Before BALDOCK and BRORBY, Circuit Judges, and BROWN, * District Judge.
*
The Honorable Wesley E. Brown, Senior District Judge, District of
Kansas, sitting by designation.
BRORBY, Circuit Judge.
The Attorney General and the United States Department of Justice (“the
government”) appeal the United States District Court for the District of
Colorado’s award of summary judgment for Sundance Associates (“Sundance”),
holding 28 C.F.R. § 75.1(c)(4)(iii) is an invalid implementation of 18 U.S.C.
§ 2257. This court assumes jurisdiction pursuant to 28 U.S.C. § 1291 and
affirms.
Concerned about the exploitation of children by pornographers, Congress
enacted the Child Protection and Obscenity Enforcement Act of 1988, Pub. L. No.
100-690, Title VII, § 7513(a), 102 Stat. 4187, 4485-4503 (significantly amended
by the Child Protection Restoration and Penalties Enhancement Act of 1990, Pub.
L. No. 101-647, Title III, §§ 301(b), 311, 104 Stat. 4808, 4816-17) to require
producers of sexually explicit matter to maintain certain records concerning the
performers 1 that might help law enforcement agencies monitor the industry. See
1
The statute requires the producers of such matter to “ascertain, by
examination of an identification document containing such information, the
performer’s name and date of birth,” to “ascertain any name, other than the
performer’s present and correct name, ever used by the performer including
maiden name, alias, nickname, stage, or professional name,” and to record this
information. 18 U.S.C. § 2257(b).
-2-
18 U.S.C. § 2257. Violations of these record keeping requirements are criminal
offenses punishable by imprisonment for up to two years for first-time offenders
and up to five years for repeat offenders. 2 See 18 U.S.C. § 2257(i).
The record keeping requirements apply to “[w]hoever produces” the
material in question. 18 U.S.C. § 2257(a) (emphasis added). The statute defines
“produces” as
to produce, manufacture, or publish any book, magazine, periodical,
film, video tape or other similar matter and includes the duplication,
reproduction, or reissuing of any such matter, but does not include
mere distribution or any other activity which does not involve hiring,
contracting for[,] managing, or otherwise arranging for the
participation of the performers depicted.
18 U.S.C. § 2257(h)(3).
Pursuant to her authority to issue regulations to carry out the statutory
requirements, see 18 U.S.C. § 2257(g), the Attorney General issued regulations
implementing the statute on April 24, 1992. 3 See 57 Fed. Reg. 15017-022 (1992);
2
With the Protection of Children Against Sexual Exploitation Act of 1977,
Pub. L. No. 95-225, § 2(a), 92 Stat. 7 (1978), Congress had already criminalized
the production and distribution of materials visually depicting minors engaged in
sexually explicit conduct. See 18 U.S.C. §§ 2251, 2252.
3
In addition to the record keeping requirements specifically discussed in
§ 2257, the Attorney General’s regulations require the persons to whom it applies
to retain copies of the performers’ identification documents, to cross-index the
records by “[a]ll names(s) of each performer, including any alias, maiden name,
-3-
28 C.F.R. § 75.
The extent to which the record keeping requirements apply to various
persons and businesses is one area the regulations attempt to define. Under the
regulatory language, the requirements apply to “[a]ny producer of any book,
magazine, periodical, film, videotape, or other matter that contains one or more
visual depictions of actual sexually explicit conduct made after November 1,
1990.” 28 C.F.R. § 75.2(a) (emphasis added). The regulation defines “producer”
as:
[A] person, including any individual, corporation, or other
organization, who is a primary producer or a secondary producer.
(1) A primary producer is any person who actually films, videotapes,
or photographs a visual depiction of actual sexually explicit conduct.
(2) A secondary producer is any person who produces, assembles,
manufactures, publishes, duplicates, reproduces, or reissues a book,
magazine, periodical, film, videotape, or other matter intended for
commercial distribution that contains a visual depiction of actual
sexually explicit conduct.
(3) The same person may be both a primary and a secondary
producer.
(4) Producer does not include persons whose activities relating to the
nickname, stage name or professional name of the performer; and according to the
title, number, or other similar identifier of each book, magazine, periodical, film,
videotape, or other matter,” and to maintain the records for as long as the
producer is in business, plus five years. 28 C.F.R. §§ 75.2(a)(1), 75.3, 75.4.
-4-
visual depiction of actual sexually explicit conduct are limited to the
following:
(i) Photo processing;
(ii) Distribution; or
(iii) Any activity, other than those activities identified in
paragraphs (c)(1) and (2) of this section, that does not involve the
hiring, contracting for, managing, or otherwise arranging for the
participation of the depicted performers.
28 C.F.R. § 75.1(c) (emphasis in original). The ultimate question in this case is
whether this definition of “producer” clashes impermissibly with the statutory
definition of “produces.”
Sundance publishes five magazines: Odyssey, Odyssey Express,
Connexion, Looking Glass, and UnReal People. These magazines print personal
or commercial announcements by individuals seeking to contact others with
similar sexual interests. The announcements are typically accompanied by
pictures, most of which are sexually explicit. The pictures are submitted
voluntarily to Sundance by the individuals advertising in the magazines.
Sundance, therefore, does not participate in the production of the photographs it
publishes in its various magazines.
Facing possible criminal liability as a “secondary producer” under the
-5-
regulation, Sundance filed a complaint seeking declaratory relief in the district
court. The parties filed cross-motions for summary judgment in the district court.
The court ruled for Sundance, finding 28 C.F.R. § 75.1(c)(4)(iii) to be an
invalid implementation of 18 U.S.C. § 2257. 4 Applying Chevron, U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the district court
found the intent of Congress to be clear from the language of the statute and,
consequently, did not inquire into the legislative history of the Act. Finding
“[t]he plain meaning of this section of the Restoration Act clearly exempts
persons whose activities ‘... include mere distribution or any other activity which
does not involve hiring, contracting for[,] managing, or otherwise arranging for
the participation of the performers depicted,’” the court determined the scope of
the regulation’s coverage to be impermissibly broader than that intended by the
statute.
The government raises one issue on appeal: whether the district court erred
4
The district court also ruled that Sundance had standing to challenge the
validity of 28 C.F.R. § 75.1(c) but lacked standing to challenge the validity of any
other aspects of the regulation or statute because it could not demonstrate “a
realistic danger of sustaining a direct injury” once the court declared
§ 75.1(c)(4)(iii) invalid. Neither of these issues was raised on appeal.
-6-
in finding 28 C.F.R. § 75.1(c)(4)(iii) to be an invalid implementation of 18 U.S.C.
§ 2257. 5
This court reviews the grant of a motion for summary judgment de novo,
applying the same legal standard used by the district court. See Kaul v. Stephan,
83 F.3d 1208, 1212 (10th Cir. 1996). Summary judgment is appropriate “if the
pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c). “When applying this standard, we examine the
factual record and reasonable inferences therefrom in the light most favorable to
the party opposing summary judgment. If there is no genuine issue of material
5
This is not the only Circuit to have addressed the validity of 28 C.F.R.
§ 75. Although it did not face the precise question raised in this case, the United
States Court of Appeals for the District of Columbia invalidated the regulation’s
requirement that producers keep records as long as they remain in business, and
the regulation’s record keeping requirement as applied to printers, film
processors, duplicators, and similar persons who simply perform services and
return the product to the producer. American Library Ass’n v. Reno, 33 F.3d 78,
91, 93 (D.C. Cir. 1994) (upholding the constitutionality of the record keeping
requirements as applied to the appellants in that case). To the extent any of those
persons may be considered “secondary producers” (for instance, as assemblers or
manufacturers), this ruling supports Sundance’s argument that the statute was not
meant to apply to everyone who could be considered “to produce, manufacture, or
publish” or “duplicat[e], reproduc[e], or reissu[e].”
-7-
fact in dispute, then we next determine if the substantive law was correctly
applied by the district court.” Kaul, 83 F.3d at 1212 (quoting Wolf v. Prudential
Ins. Co., 50 F.3d 793, 796 (10th Cir. 1995)).
The facts in this case are not in dispute. The only question is whether the
district court was correct in its legal analysis of the statute and regulation. We
review de novo a district court’s interpretation of a statute. See United States v.
Diaz, 989 F.2d 391, 392 (10th Cir. 1993).
When faced with a challenge to the validity of a regulation, we apply the
analytical framework provided by the United States Supreme Court in Chevron.
As an initial matter, we decide “whether Congress has directly spoken to the
precise question at issue.” Chevron, 467 U.S. at 842. “‘If the statute is clear and
unambiguous “that is the end of the matter, for the court, as well as the agency,
must give effect to the unambiguously expressed intent of Congress.” ... The
traditional deference courts pay to agency interpretation is not to be applied to
alter the clearly expressed intent of Congress.’” K Mart Corp. v. Cartier, Inc.,
486 U.S. 281, 291 (1988) (quoting Board of Governors of Fed. Reserv. Sys. v.
Dimension Fin. Corp., 474 U.S. 361, 368 (1986) (quoting Chevron, 467 U.S. at
842-43)). If, however, the statute does not speak directly to the question at issue
-8-
or is ambiguous, the court, giving considerable weight to the agency’s
interpretation, must decide if the agency’s answer is “a permissible construction
of the statute.” Chevron, 467 U.S. at 843-44.
In this case, we need go no further than the initial analysis. “[T]he text and
reasonable inferences from it give a clear answer against the Government, and
that ... is ‘the end of the matter.’” Brown v. Gardner, 513 U.S. 115, 120 (1994)
(quoting Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 409 (1993) (quoting
Chevron, 467 U.S. at 842)). We agree with the district court that “[t]he plain
meaning of [§ 2257((h)(3)] clearly exempts persons whose activities ‘... include
mere distribution or any other activity which does not involve hiring, contracting
for[,] managing, or otherwise arranging for the participation of the performers
depicted.’”
Under the statutory scheme, the requirements apply to persons or
organizations who “produce, manufacture, or publish” any of the identified
matter, including those involved in “duplication, reproduction, or reissuing” of
the matter, but not including those who merely distribute or whose activity “does
not involve hiring, contracting for[,] managing, or otherwise arranging for the
participation of the performers depicted.” 18 U.S.C. § 2257(h)(3). The plain
-9-
language of the statute establishes a group possibly subject to its requirements
(including those who “produce, manufacture, or publish” and those involved in
“duplication, reproduction, or reissuing”) and then excludes from that group those
who basically have had no contact with the performers (mere distributors and
others not involved in the “hiring, contracting for[,] managing, or otherwise
arranging for the participation of the performers depicted”). 6 Id.
The Attorney General’s regulatory definition of producer follows the
statute in establishing a class of individuals and organizations possibly subject to
the record keeping requirements, but it fails to exclude persons from the class that
the statute requires. The regulation conditions its exclusion of those “not
involve[d in] the hiring, contracting for, managing, or otherwise arranging for the
participation of the depicted performers” to persons who are not a primary or
secondary producer. 28 C.F.R. § 75.1(c)(4)(iii). The statute makes no such
condition. This is not a minor matter, because, as will be explained in detail
6
Without deciding the issue, another Circuit appeared to read the final
clause in § 2257(h)(3) in a similar manner. American Library Ass’n v. Barr, 956
F.2d 1178, 1186 n.5 (D.C. Cir. 1992). In that case, the court stated the 1990
amendment to the statute, which added the clause in issue, “clarified the
definition of ‘produces’ to exclude ‘mere distribution or any other activity which
does not involve hiring, contracting for[,] managing, or otherwise arranging for
the participation of the performers depicted.’” Id.
-10-
below, the practical effect of the regulatory scheme is that the exclusion cannot be
applied to anyone. “[A]n agency’s interpretation of a statute is not entitled to
deference when it goes beyond the meaning that the statute can bear.” MCI
Telecomm. Corp. v. American Tel. & Tel. Co., 512 U.S. 218, 234 (1994). An
agency’s rulemaking power is not “the power to make law,” it is only the
“‘power to adopt regulations to carry into effect the will of Congress as expressed
by the statute.’” Mabry v. State Bd. of Community Colleges & Occupational
Educ., 813 F.2d 311, 315 (10th Cir.) (quoting Ernst & Ernst v. Hochfelder, 425
U.S. 185, 213-14 (1976) (further quotation marks and citations omitted), cert.
denied, 484 U.S. 849 (1987).
Attempting to justify its regulation, the government urges upon this court a
tortured reading of the statute. The government contends the second part of
§ 2257(h)(3), beginning with “does not include mere distribution,” was actually
intended to broaden the scope of the statute. The government’s approach leads us
down a path toward Alice’s Wonderland, where up is down and down is up and
words mean anything. The words “but does not include ... any other activity
which does not involve hiring, contracting for[,] managing, or otherwise
arranging for the participation of the performers depicted,” the argument goes,
were not intended to “not include” anyone listed above, but were actually
-11-
intended by implication only to include more activities in the definition. This is
too much of a stretch. In reviewing statutes, courts do not assume the language is
imprecise, as the government would have us do. See United States v. LaBonte,
___ U.S. ___, 117 S. Ct. 1673, 1677 (1997). Rather, we assume that in drafting
legislation, Congress says what it means. Id. This is not a case of verbal
ambiguity presenting accepted alternative meanings; it is one of an agency
twisting words to reach a result it prefers. Although § 2257(h)(3) was poorly
drafted and should never be used as a model of the English language, its intent is
clear to this court.
One wonders, looking at the regulation, why the government did not follow
the logic of its own argument when implementing the regulation. 7 If the second
clause of the statute actually was intended to broaden the definition of produces
to include activities that “involve hiring, contracting for[,] managing, or
7
Without explanation, the government asserts “the regulations make clear
that the statute applies to all activities which ‘involve hiring, contracting for[,]
managing, or otherwise arranging for the participation of the performers
depicted[,]’regardless of whether or not the entity is a producer by virtue of being
engaged in activities listed in the first clause.” The regulation does not do this.
The regulation defines a producer as a primary or secondary producer. The
definitions of primary and secondary producers do not include activities that
involve hiring, contracting for, managing, or otherwise arranging for the
participation of the performers. See 28 C.F.R. § 75.1(c).
-12-
otherwise arranging for the participation of the performers depicted,” it seems
odd that none of those activities are included in the regulatory definition of
producer. The regulation defines a producer as a person who is a primary or
secondary producer, yet the definitions of primary and secondary producer do not
address hiring, contracting for, managing, or otherwise arranging for
participation, as they should according to the government’s arguments. See 28
C.F.R. § 75.1(c)(1)-(3).
Explaining its position, the government states “[t]he structure of the statute,
which identifies ‘mere distribution’ as the activity specifically excluded from the
definition of ‘produces,’ suggests that Congress did not intend to exempt actual
producers from the definition, but only those whose involvement in production is
wholly tangential.” The problem with this position is the statute does not identify
“mere distribution” as the only activity specifically excluded, but also “any other
activity” basically not involving contact with the performers. 18 U.S.C.
§ 2257(h)(3). The government’s explanation simply ignores the obvious import
of the final clause of the statute.
The government also argues the Attorney General properly rejected the
district court’s reading of the statute because if “[S]ection 2257(h)(3) is
-13-
interpreted that way, the clause ‘includ[ing] the duplication, reproduction, or
reissuing of any such matter’ would be read out of the statute, because such
activities would not necessarily involve the hiring, contracting for, or managing
of performers.” This is wrong. The clause would not be read out of the statute
because it is easy to imagine persons duplicating, reproducing, or reissuing
material they originally created who would have had the requisite contact with the
performers, and as a result such persons would be subject to the requirements of
the statute. Just because the exclusionary clause would make the statute
inapplicable to some duplicators, reproducers, and reissuers is no reason to justify
reading it out of the statute — narrowing the field is the very nature of
exclusions.
The government further argues its comprehensive regulatory scheme is
necessary because of the difficulties involved in enforcing the record keeping
requirements only on those producers who hire, contract for, manage, or
otherwise make arrangements for the participation of sexual performers. 8 “[S]uch
considerations address themselves to Congress, not to the courts.” MCI
8
This clause may not narrow application of the statute as significantly as
the government suggests. "[A]rranging for the participation of the performers
depicted," may well encompass a broad range of activities, although that will be
for later courts to decide.
-14-
Telecommunications, 512 U.S. at 234 (quoting Armour Packing Co. v. United
States, 209 U.S. 56, 82 (1908)). Of course, this court is sympathetic to the
purported 9 goals of this legislation — preventing the sexual exploitation of
children. And although it seems the Attorney General has identified a problem
with its effective enforcement — that it is drawn in such a way as to make it
narrow in application 10 — neither the court nor the Attorney General has the
authority to rewrite a poor piece of legislation (if, indeed, that is what it is). That
responsibility lies solely with Congress.
Even if we assumed for purposes of this analysis that the statutory language
was unclear, and proceeded to the second stage of Chevron analysis, we would
have to find the Attorney General’s regulation to be an impermissible
9
Because the statute expressly forbids the use of the mandated records,
directly or indirectly, “as evidence against any person with respect to any
violation of law,” other than the failure to maintain the records in the first place,
it might only be of limited use in aiding enforcement of child pornography laws.
18 U.S.C. § 2257(d)(1); see American Library Ass’n v. Reno, 47 F.3d 1215, 1216
(D.C. Cir. 1995) (Tatel, J., dissenting from denial of suggestion for rehearing in
banc).
10
One might question whether the statute is narrowly drawn by mistake or
if it was narrowly drawn on purpose, because of a considered congressional
determination that it could be subject to constitutional attack, as an earlier version
had been. See American Library Ass’n v. Barr, 956 F.2d at 1186-87; American
Library Ass’n v. Thornburgh, 713 F. Supp. 469 (D.D.C. 1989).
-15-
construction of the statute. The regulation makes the final part of § 2257(h)(3),
beginning with “or any other activity” superfluous. Although we afford deference
to the Attorney General’s interpretation of a statute under her purview, we cannot
overlook an interpretation that flies in the face of the statutory language. See
Bridger Coal Co./Pacific Minerals, Inc. v. Director, Office of Workers'
Compensation Programs, U.S. Dep't of Labor, 927 F.2d 1150, 1153 (10th Cir.
1991) ("We will not construe a statute in a way that renders words or phrases
meaningless, redundant, or superfluous.").
The regulation defines “producer as any “individual, corporation, or other
organization, who is a primary producer or secondary producer.” 28 C.F.R.
§ 75.1(c) (emphasis in original). Obviously then, if individuals, corporations, or
other organizations are not primary or secondary producers, they are not
producers for purposes of the regulation. That means, by definition, producers
must engage in the activities listed in either 28 C.F.R. § 75.1(c)(1) or (2). See 28
C.F.R. § 75.1(c). For the exception to apply, however, one cannot be engaged in
the activities listed in 28 C.F.R. § 75.1(c)(1) or (2). See 28 C.F.R.
§ 75.1(c)(4)(iii). Therefore, the exception is meaningless; it excepts those
persons and organizations to which the regulation does not apply in the first place
and it does not except any of the persons and organizations to which the
-16-
regulation does apply. 11
We have to assume Congress intended its words “but does not include ...
any other activity which does not involve hiring, contracting for[,] managing, or
otherwise arranging for the participation of the performers depicted” to have
some meaning and effect. See Reiter v. Sonotone Corp., 442 U.S. 330, 339
(1979) ("In construing a statute we are obliged to give effect, if possible, to every
word Congress used."). Because the government’s construction makes these
words mere surplusage, it cannot stand.
The government correctly notes the district court should not have held all
of 28 C.F.R. § 75.1(c)(4)(iii) invalid. The flaw in the subsection of the regulation
arises from the clause “other than those activities identified in paragraphs (c)(1)
11
This raises a question about the Attorney General’s specific exclusion
for photo processing. 28 C.F.R. § 75.1(c)(4)(i). Unlike the other specific
exclusion, distribution, photo processing is not mentioned in the statute. If photo
processing is one of the activities listed in the definition of secondary producer,
for example producing or manufacturing (it clearly does not fall into the category
of primary producer), what makes it different than many other similar activities
for which there is no exclusion? If it does not fall into the category of secondary
producer, then no exclusion is necessary in the first place. Obviously, even the
Attorney General recognized Congress did not intend for everyone falling into the
categories of production, manufacture, publication, duplication, reproduction, and
reissuing to be subject to the record keeping requirements, or the regulation
would not have included a specific exclusion for photo processing.
-17-
and (2) of this section.” 28 C.F.R. § 75.1(c)(4)(iii) Our decision, therefore,
necessitates only that clause be stricken from § 75.1(c)(4)(iii).
For the foregoing reasons, the district court’s decision is AFFIRMED;
however, we remand to the district court so it may issue a judgment striking from
§ 75.1(c)(4)(iii) only the clause identified above.
-18-