Billy says, "Rob Lowe would look at this situation and go, 'Ooh, now that's embarrassing." In 1988, Rob Lowe filmed a sexual encounter with a 23-year-old woman and a 16-year-old girl (the age of consent in that state was 14 for sexual activity but 18 for filmed sexual encounters). The tape was leaked when the minor's mother filed a civil lawsuit against him. Lowe settled, claiming he hadn't known the girl's age. In 1990, he went into rehab, largely as a result of the scandal.
The episode's title references the 1965 Broadway musical, "On a Clear Day, You Can See Forever" (as well as the subsequent film (1970) and song popularized by Barbra Streisand).