# Petition — Pennsylvania State University v. American Future Systems, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1119%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1982 - **Citation:** 459 U.S. 1093 ## Text | Office - Supreme Court, U.S FILED NOV 5 1962 82-776 IN THE a Supreme Court of the United States OCTOBER TERM, 1982 THE PENNSYLVANIA STATE UNIVERSITY, BOARD OF TRUSTEES OF THE PENNSYLVANIA STATE UNIVERSITY, JOHN W. OSWALD and M. LEE UPCRAFT, Petitioners, Vv. AMERICAN FUTURE SYSTEMS, INC., STEVEN BRUBAKER, RICHARD J. WINGERT, W. BRUCE DEL VALLE, JOAN D. VARSICS, DENNIS C. HABACHER, JOHN P. SPILLER, and KEVIN GRAVES, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Delbert J. McQuaide (Counsel of Record) R. Mark Faulkner McQUAIDE, BLASKO, SCHWARTZ, FLEMING & FAULKNER, Inc. 811 University Drive State College, Pennsylvania 16801 (814) 238-4926 Attorneys for Petitioners THE CASILLAS PRESS. INC. ~ 1717 K Street N.W. — Washington, 0.C. — 223-1220 (i) QUESTION PRESENTED Whether a state university may control the use of its property by imposing regulations on the manner and con- tent of commercial speech which prohibit a commercial vendor from the direct solicitation and sale of merchan- dise to groups of students in university owned dormitories, where the purpose of the regulation is to serve the universi- ty’s interest in maintaining a proper study atmosphere in the dormitories and in protecting the privacy of students? (iii) TABLE OF CONTENTS Page QUESTION PRESENTED ........ cc ccccccccecce re ceeeereues i ED * vcck cp snswoucwadsssmenseebscteoncseNes 1 ts dn edn ids i edubndaneeeenensdeesssnnusees 2 CONSTITUTIONAL PROVISIONS INVOLVED .............. 2 i i a eee a ene ebecendeten 2 REASONS FOR GRANTING THE WRIT ..................... 7 i oe a te ea eee ennsnes 12 CONTENTS OF APPENDIX Appendix A- Opinion of the United States District Court for the Middle District of Penn- SE dic ticnee meni edneds oeiiieadescéane la Appendix B- Opinion of the United States Court of Appeals for the Third Circuit ................ 26a Appendix C - Opinion Sur Petition for Rehearing of the United States Court of Appeals for the PEE curbbaveddnbddddenss sedécecoast dtu Appendix D- Opinion of the United States District Court for the Middle District of Penn- SE 4 bdedneneeesds dbvacdeendtwescoeers Sla Appendix E- Opinion of the United States Court of Appeals for the Third Circuit ................ 80a (iv) TABLE OF AUTHORITIES Cases: Page Adderly v. Florida, I Da ie a eben an eben 8 American Future Systems, Inc. v. Pa. State University, 464 F Supp. 1252 (M.D. Pa. 1979) ..............5. 4 American Future Systems, Inc. v. Pa. State University, 618 F.2d 252 (3rd Cir. 1980) .... 2... 6. eee 4,5 American Future Systems, Inc. v. Pennsylvania, Etc., SP, EE OU, HEED x cndceccvcecccccesccccces 1,5 American Future Systems, Inc. v. Pa. State University, Docket No. 81-2476, Slip Op. EMD. occu gagudtssueseessccdcudoecss 2,5 American Future Systems, Inc. v. The Pennsylvania State University, Sur Petition for Rehearing, Docket No. 81-2674, Slip Op. (3rd. Cir., MD vc odendg ence cepeeck sbe0eecesccesense 2,7 Bates v. State Bar, ie ek eeehdbes chbeuneeceuee ee 6,8 Bigelow v. Virginia, ee cbs abebbebeted 6,7 Central Hudson Gas and Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 ts te ees eaed een dees 60800 e right is founded. . .” ° United States v. 12 200-Ft Reels of Super 8 Mm. Film, 413 U.S. 123 (1973), quoting Hudson County Vater Co. v. McCarter, 209 U.S. 349, 355 (1908) (Holmes, J.).” American Future Systems v. Pennsylvania State University, Sur Petition for Rehearing, September 21, 1982, Opinion of Adams, J., Slip Op. p. 7. The jurisdiction of the Court of Appeals for the Third Circuit was pursuant to 28 U.S.C. § 1291. Jurisdiction of the United States District Court for the Middle District of Pennsylvania was predicated on 28 U.S.C. § 1331 and § 1343. REASONS FOR GRANTING THE WRIT The opinion of the Third Circuit is in conflict with the applicable decisions of this Court on an important issue of constitutional law. Because the Third Circuit has extended the scope of First Amendment protection of commercial speech far beyond any boundary suggested by this Court, consideration of the issue is necessary at this time to pro- vide guidance to state universities throughout the United States. Failure to deal with this issue now will, in the words of Judge Adams, send a signal “to state universities indicating that they may well lose a significant portion of their control over commercial activity on their campuses.” American Future Systems, Inc. v. The Pennsylvania Staie University, Sur Petition for Rehearing, Slip Op. at 7 (3rd Cir., September 21, 1982). This may cause the unnecessary development of a backlog of cases which will ultimately have to be dealt with by the federal courts. Generally, the commercial speech cases before this Court have dealt with total prohibitions on certain kinds of commercial speech. Bigelow v. Virginia, 421 U.S. 809 (1975) (state law banning all publications encouraging abortion held to be unconstitutional); Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976) (state law banning pharmacists from all advertising of the sale of prescription drugs held to be un- constitutional); Bates v. State Bar, 433 U.S. 350 (1977) (state rule which prohibited any advertising by a lawyer held to be unconstitutional); Ohralik v. Ohio State Bar Association, 436 U.S. 447 (1978) (state rule banning lawyer from in-person solicitation of clients held to be constitutional); Central Hudson Gas and Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980) (state rule banning all advertising by electric utility held to be unconstitutional, but a ban on advertising designed to increase electrical consumption would serve State interest in energy conservation, and consequently, would be constitutional). These decisions do not suggest that a state university may not impose time, place and manner restrictions on the commercial use of its property. Nor do they suggest that in determining the manner in which a vendor will use its property, a state university may not impose restrictions on the content of commercial speech which are designed to discourage and minimize that commercial use. As this Court has stated, “[t}he state, no less than a private owner of property, has power to preserve the property under its control for the use to which it is lawfully dedicated.” Adderly v. Florida, 385 U.S. 39 at 47 (1966). This court has also recognized the validity of time, place and manner regulations on the content of speech where the basis of the regulation is not hostility to the ideas or facts stated, but rather is intended to preserve property for the purposes to which it is dedicated. Consolidated Edison Co. v. Public Service Com’n, 447 U.S. 530 (1980). The Third Circuit panel recognized that the vendor here may solicit sales of its merchandise directly to an in- dividual student who invites the vendor to that student’s dormitory room. Where a vendor has ample alternative means of communication, as in this case, a restriction on 9 group solicitation of sales should not be of constitutional dimension. The federal courts should not be regulating the specific manner in which a state university permits out- siders to use its residence halls, particularly where, as in this case, there has been a carefui effort to balance the per- sonal commercial needs of students with the need to en- sure a proper study atmosphere and personal privacy. In any event, it is apparent on the face of the matter that Penn State’s policy meets the test of Central Hudson, which is whether “the regulation directly advances the governmental interest asserted and whether it is not more extensive than is necessary to serve that interest.” 447 U.S. at 566. The policy, like the proscription in Ohralik, supra, is a prophylactic measure designed to reduce and minimize the level of commercial activity which might intrude upon the interests advanced by Penn State, rather than a measure designed to control specific conduct or speech while it is occurring in the residence hall. The policy is designed to and does in fact discourage group commercial activity, in- cluding both the propusal and consummation of group sales transactions, in the residence halls, while not totally banning commercial transactions because of the need to balance the personal commercial needs of students with the needs for a proper study atmosphere and personal privacy. There can be no better proof that the policy serves Penn State’s articulated interests than the fact that AFS refused to conduct its sales activities under the policy. This reduced the level of commercial activity in the residence halls substantially, inasmuch as AFS proposes to conduct large numbers of so-called demonstrations. Thus, the in- terests of study and privacy were served on a prophylactic basis. Penn State may, under Ohralik, supra, and Central Hudson, supra, impose such a limitation upon commercial 10 speech in the residence halls. In Ohralik, the Supreme Court recognized that the state may impose limitations on commercial speech which are “prophylactic measures whose objective is the prevention of harm before it occurs.” 436 U.S. at 464. In Central Hudson, the Supreme Court also recognized that the state may impose restric- tions on commercial speech in order to discourage com- mercial transactions, reducing the level of commercial ac- tivity in order to serve a state interest. There, the state had banned all advertising by a utility. The court held the total ban to be unconstitutional, but recognized that a more nar- rowly drawn regulation could be valid. The court stated: “In contrast, the state’s interest in energy conser- vation is directly advanced by the Commission order at issue here. There is an immediate con- nection between advertising and demand for electricity. Central Hudson would not contest the advertising ban unless it believed that promotion would increase its sales. Thus, we find a direct link between the state interest in conservation and the Commission’s order.” 447 U.S. at 569. Like Central Hudson, there is a “direct link” between Penn State’s policy and the interests of study and privacy. It is obvious that there is an “immediate connection” be- .ween group solicitation and sales and the level of de- mand, i.e., commercial activity, in the residence halls. Thus, Penn State’s articulated interests are directly served. Nor is there a requirement that Penn State demonstrate that the specific conduct of this vendor — AFS — will violate the interests the policy protects. In both Ohralik and Heffron v. Intern. Soc. For Krishna Consciousness, 452 U.S. 640 (1981), the Supreme Court stated that specific evidence of harm was not required to uphold a policy restricting speech related activities. In Ohralik, the lawyer’s speech did not cause the harm the policy sought to avoid. In Heffron, the impact of the plaintiff's solicita- tions would have been minimal on the state interest of crowd control. Yet, in both cases, the restrictions were upheld because the Court focused on the potential for harm to the state interests in the absence of the policy. By requiring specific evidence of harm from the AFS sales solicitation, and ignoring the potential for harm if AFS and all commercial businesses may solicit sales, the panel decision is contrary to Ohralik and Heffron. Thus, the panel of the Third Circuit has made a radical extension of the First Amendment protection of commer- cial speech which calls for further review at this time. Although there has been a remand to the District Court for further proceedings, the importance of the issue and the intracircuit conflict qualify this case for review despite its interlocutory status. See, Land v. Dollar, 330 U.S. 731, 734, n.2 (1946); Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 685, n.3 (1947); Dickinson vy. Petroleum Conversion Corp., 338 U.S. 507, 508 (1950). At the very least, the petition should be granted for the purpose of remanding the action to the Third Circuit for en banc review. See, e.g., United States ex rel. Robinson v. Johnston, 316 U.S. 649 (1942). 12 CONCLUSION For the reasons stated, the petition for writ of certiorari should be granted. Respectfully submitted, Delbert J. McQuaide R. Mark Faulkner McQUAIDE, BLASKO, SCHWARTZ, FLEMING & FAULKNER, Inc. 811 University Drive State College, Pennsylvania 16801 (814) 238-4926 Attorneys for Petitioners November 1982 APPENDIX A UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA AMERICAN FUTURE SYSTEMS, INC., et al., : Plaintiffs : Civil No. 81-0171 vs. : Complaint Filed : 2/5/81 THE PENNSYLVANIA STATE : (Judge Muir) UNIVERSITY, et al., : Defendants APPEARANCES: For Plaintiffs Henry T. Reath, Esq. George E. Pierce, Jr., Esq. Duane, Morris & Heckscher One Franklin Plaza Philadelphia, Pa. 19102 For Defendants Delbert J. McQuaide, Esq. R. Mark Faulkner, Esq. McQuaide, Blasko, Schwartz, Fleming & Faulkner 811 University Drive State College, Pa. 16801 FILED WILLIAMSPORT, PA SEP 16 1981 DONALD R. BERRY, Clerk DEPUTY CLERK 2a UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA AMERICAN FUTURE SYSTEMS, INC., et al., : Plaintiffs : Civil No. 81-0171 VS. : Complaint Filed : 2/5/81 THE PENNSYLVANIA STATE : (Judge Muir) UNIVERSITY, et al., : Defendants OPINION MUIR, District Judge. Plantiffs filed this action alleging violations of their constitutional rights and of rights granted by Pennsylvania law on February 5, 1981. Jurisdiction is alleged to arise under 28 U.S.C. §§ 1331 and 1343 and the doctrine of pendent jurisdiction. Also on February 5, 1981, Plaintiffs filed a motion for a preliminary injunction which was denied by this Court in American Future Systems vs. Pennsylvania State University, 510 F.Supp. 983 (M.D. Pa. 1981). On July 17, 1981, Defendants filed a motion for summary judgment and supporting brief. On August 24, 1981, Plaintiffs responded, and on August 31, 1981, Defendants filed a reply. For the reasons set forth below, Defendants’ motion for summary judgment will be granted. This case is the second one before the Court involving policies of Pennsylvania State University (Penn State) relating to commercial activities in its dormitories. In the first lawsuit, judgment was granted in favor of Penn State upholding its regulations against an attack that they 3a violated American Future Systems’ (AFS) First Amend- ment rights American Future Systems, Inc. vs. Penn- sylvania State University, 464 F.Supp. 1252 (M.D. Pa. 1979), affd 618 F.2d 252 (3d Cir. 1980) (“American Future Systems 7”). AFS is a corporation whose principal business is the sale of cookware, china, crystal, and silverware through demonstrations of its merchandise at colleges throughout the United States. AFS seeks by this action to be permitted to present sales demonstrations at the invitation of in- dividual students in the common areas and dormitory rooms within the residence halls of Penn State, to disseminate commercial information to groups of students through sales demonstrations at the invitation of in- dividual host students in their individual dormitory rooms, and to consummate sales to individual students in the student hosts’ rooms and residence halls of Penn State. Plaintiffs Wingert and Brubaker are Penn State students who formerly resided in Penn State residence halls. Wingert withdrew as a student at Penn State in February 1981 and is no longer enrolled. Brubaker, while still enrolled as a student, no longer resides in a Penn State residence hall. Wingert and Brubaker seek relief permit- ting them to invite AFS to common areas and their in- dividual dormitory rooms and residence halls, to conduct in their rooms and in common areas of residence halls, sales demonstrations to groups of invited students and to invite AFS to their dormitory rooms for purposes of con- summating sales of goods to other students following the demonstrations. Plaintiffs DelValle, Varsics, Habacher and Spilier are current Penn State students who do not reside in residence halls. DelValle, Varsics, Habacher and Spiller seek an order permitting them to attend and par- ticipate in AFS group demonstrations in common areas da and dormitory rooms and to consummate sales from AFS in those rooms. As this Court already held in its denial of Plaintiffs’ mo- tion for a preliminary injunction, the policy of Penn State during the time that American Future Systems I was litigated and now is that (1) AFS may conduct group demonstrations in specified common areas of each residence hall; (2) following those demonstrations a stu- dent may invite an AFS representative to the student’s room to purchase AFS goods; (3) AFS is free to solicit in- vitations to individual students’ rooms at the group demonstrations or by telephone or mail; (4) AFS is not permitted to conduct group demonstrations in an in- d'vidual dormitory room; (5) AFS is not permitted to con- _ summate sales in dormitory rooms to a purchaser other than the occupant of the room; (6) AFS is not permitted to conduct group solicitations of sales in the common areas of residence halls; (7) AFS is not permitted to consummate commercial transactions in the common areas of residence halls. American Future Systems vs. Pennsylvania State University, 510 F.Supp. 983, 985 (M.D. Pa. 1981). It is Plaintiffs’ position that under the ruling of the Court of Appeals in American Future Systems I they are entitled to the relief sought in this action. Defendants are of the view that their policies relating to commercial activities in Penn State’s dormitories are consistent with the Court of Ap- peals’ opinion in American Future Systems I, and that Plaintiffs are not entitled to relief. Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions in the record, together with he affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of iaw. Rule 56(c) of the Federal Rules of Civil Procedure. Sa Because the bases for granting summary judgment are somewhat different as to Plaintiff AFS, to Plaintiffs Wingert and Brubaker, and to Plaintiffs DelValle, Var- sics, Habacher and Spiller, AFS and each group of in- dividual Plaintiffs will be discussed separately. I. AFS. AFS’s primary contention is that the decision of the Court of Appeals in American Future Systems I granted AFS certain rights that Penn State has abridged. To the contrary, the Court of Appeals’ opinion contains no declaration of AFS’s rights, and in that opinion the Court concluded that Penn State’s policies governing commercial activity was wholly consistent with AFS’s First and Four- teenth amendment rights. The Court of Appeals recogniz- ed that a total suppression of AFS’s commercial speech would probably violate AFS’s constitutional rights. American Future Systems I, 618 F.2d at 258. In holding that Penn State’s distinction between non-commercial and commercial speech was valid, the Court of Ap»veals noted that Penn State hau vu.ly restricted, rather than suppress- ed, speech. “[AFS] sales representatives are allowed into the residence halls to present demonstrations to groups of students, [but] they cannot consummate sales at these gatherings. Even that restriction is removed if the sales representative is invited to the hall by an individual stu- dent who decides to purchase the merchandise marketed by AFS.” 618 F.2d at 258. There is a dispute as to whether the Court of Appeals’ decision in American Future Systems I actually vests in AFS the right to set up group demonstrations of its products in the Penn State residence halls. However, inasmuch as Penn State policies permit such group demonstrations, this Court need not reach that question. The issues now before the Court are (1) whether 6a Penn State may limit AFS to presentations in common areas, aS Opposed to private rooms, and may limit AFS’s actual solicitation to private rooms and not permit such solicitation in common areas; and (2) whether AFS’s pro- posed presentation does in fact constitute solicitation, in whole or in part. Penn State’s policy governing commercial activity in its residence halls has remained unchanged since AFS made its initial attempts to conduct demonstrations of its pro- ducts in 1977. Specifically, in effect at the time of the American Fut. ~ Systems / litigation was Penn State’s policy that AFS could present demonstrations, but not solicitations of sales in the common areas of residence halls, and that AFS is free to consummate commercial transactions (i.e. solicitation) in student’s rooms, but not in common areas. See American Future Systems 1, 464 F.Supp. 1252, 1258 (¢ 59); American Future Systems vs. Pennsylvania State University, 510 F.Supp. 983, 985 (M.D. Pa. 1981). The record shows that AFS was aware of this policy at the time that it filed the American Future Systems I action. See American Future Systems 1, 464 F.Supp. at 1258 (€ 59). AFS’s attempt to relitigate the con- stitutionality of Penn State’s policies regarding commer- cial activities in dormitories is barred by the doctrine of res judicata. The doctrine provides that a party who has suffered an adverse judgment may not, in subsequent litigation against the same party, seek to relitigate any issue that was or could have been determined in the first action. See Montana vs. United States, 440 U.S. 147, 153-54 (1979). The purpose of this doctrine is to ensure finality in the ad- judication of disputes and to provide a conclusive resolu- tion not only of matters that were actually considered but also of all of those which could have been considered. 7a Cramer vs. General Telephone & Electronics Corp., 582 F.2d 259, 266 (3d Cir. 1978), cert. denied, 439 U.S. 1129 (1979). In order for res judicata to apply, three elements must be present: (1) there must be an identity of parties; (2) there must be in existence a valid, final judgment on the merits by a Court of competent jurisdiction; and (3) the se- cond action must concern the same subject matter or cause of action as the prior suit. Sworob vs. Harris, 451 F.Supp. 96, 99-100 (E.D. Pa.) aff'd 578 F.2d 1376 (3d Cir. 1978) (memorandum). There can be no dispute as to the first two requirements. Here, AFS and the same Penn State defen- dants have been involved in both actions. Further, there is a final, valid judgment upholding Penn State’s policy governing commercial activities in dormitories. As to the third requirement, the second action may be said to in- volve the same cause of action if liability is sought to be imposed on a different theory but based on the same “liability creating conduct” of the Defendant which gave rise to the first action. Coggins vs. Carpenter, 463 F.Supp. 270, 280 (E.D. Pa. 1979), citing Williamson vs. Columbia Gas & Electric Corp., 186 F.2d 464 (3d Cir. 1950), cert. denied, 341 U.S. 921 (1951). Based on the allegations of Plaintiffs’ complaint, the exhibits attached thereto, and affidavits submitted in this matter, the Court concludes that AFS is complaining about the same conduct of which it complained in American Future Systems I, namely Penn State’s regulations limiting access by AFS to the university’s dormitories. The Court also concludes that AFS had in that action opportunity to present to the Court and to the Court of Appeals any claims it might have had as to the precise contours of the permissible scope of group demonstrations as well as any other matters relating to any other constitutional rights that may have been adversely affected by Penn State’s policies. Since the 8a Court of Appeals has already upheld the validity of Penn State’s policies with respect to commercial activities within residence halls, and since AFS had a full and fair oppor- tunity to litigate the validity of that policy, or any aspect thereof, in the first action, res judicata operates to preclude AFS’s challenge to that policy in this action. Therefore, summary judgment will be granted in favor of the Plaintiffs as to AFS’s claim that Penn State’s policy with respect to commercial solicitation and activity in the dormitories violates AFS’s First and Fourteenth Amend- ment rights. AFS’s second claim is that Penn State’s position that it may censor the substance of AFS’s demonstrations violates AFS’s constitutional rights. Penn State contends that certain portions of the AFS demonstration involve the solicitation of sales rather than educational or informa- tional material within the normal meaning of “demonstra- tion.” Penn State claims that these provisions which in- volve price, credit and guarantee terms, are properly con- sidered commercial rather than educational in nature, and are therefore properly restricted to individual solicitation in private rooms and may be excluded from the demonstrations in common areas. (Defendants’ Brief in Support of Motion for Summary Judgment at pp. 11-12.) AFS, in response, claims that if it were to present its demonstrations in the manner required by the University, it might appear to its listeners to be engaging in sharp business practices. AFS claims that if it is allowed to demonstrate and display its products, but is not allowed to give information regarding prices, guarantees, exchange policies and specially designed credit terms to fit students’ budgets, its sales representatives’ credibility as legitimate and honest people would be undermined. (Plaintiffs’ Brief in Opposition to Defendants’ Motion for Summary Judg- ment at pp. 8-9). 9a The Court of Appeals’ decision in American Future Systems I specifically upheld Penn State’s regulations to the extent that they rested upon a distinction between com- mercial and non-commercial speech. Addressing the ques- tion of solicitation and consummation of sales in common areas, the Court of Appeals first noted that Penn State had advanced reasonable objectives to support its ban on group commercial activity in its residence halls. Finding that Penn State had not acted in an arbitrary, capricious, or invidious manner in distinguishing between commercial and non-commercial speech (i.e. solicitations as opposed to demonstrations), the Court concluded that Penn State’s policies do not violate the First Amendment. American Future Systems I, 618 F.2d at 259. Thus, AFS’s position that the Court of Appeals did not anticipate or recognize distinctions between educational programs and commer- cial solicitation (Plaintiffs’ Brief in Opposition to Defen- dants’ Motion for Summary Judgment at p. 8) is clearly er- roneous. In American Future Systems I, this Court and the Court of Appeals were not faced with the question of whether particular aspects of AFS’s presentations were educational or commercial. Thus, this aspect of AFS’s claim is not bar- red by res judicata. AFS’s proposed presentation is evidenced by the cue cards that are attached to the complaint. The parties have agreed in their statement of material facts that the cue cards in Exhibit E of the complaint constitute substantially all of AFS’s presentation. Cards 1 through 23 are clearly educational and instructional in nature, and it is permissi- ble to convey this information at AFS’s group demonstra- tions. Cards 24 through 31 relate to guarantee and pay- ment plans offered to the students. These cards constitute solicitation of sales, and Penn State may constitutionally 10a prohibit AFS from presenting this information as a part of its demonstrations. The material contained in cards 32 through 36 is informational and permissible. The mate: ‘al in the first paragraph of card 37 deals with the price of AFS’s goods, and constitutes impermissible solicitation. The material contained in the remainder of card 37 and cards 38 through 51 is instructional and permissible. The material contained ‘n cards 52 through 65, as well as those portions of cards 66 and 67 that involve distribution of contracts for purchase of AFS goods, involves impermissi- ble solicitation. The only portions of AFS’s demonstration that are at issue in this segment of the lawsuit are those which the Court has found to be impermissible pursuant to the Court of Appeals’s ruling in American Future Systems 1. Since there is no issue as to any material facts, summary judgment is appropriate. The Court will therefore enter summary judgment in favor of Defendants as to this issue. Il. Plaintiffs Brubaker and Wingert. Defendants first assert that the claims of Brubaker and Wingert are moot because Wingert has withdrawn from the university and Brubaker has not renewed his contract for a university dormitory room during the upcoming academic year. Plaintiffs, in an apparent attempt to solve the “mootness” problem, on August 31, 1981, filed a mo- tion to join an additional Plaintiff. The proposed Plain- tiff, Kevin Graves, is a present Penn State student who resides in a Penn State residence hall and who has notified Penn State of his intention to hold an AFS demonstration in his dormitory room on September 14, 1981. (Affidavit of Kevin Graves at pp. 1-2). Graves has not, to the Court’s knowledge, been denied permission to hold the AFS demonstration in his dormitory room. (Memorandum of Law in Support of Plaintiffs’ Motion to Join Kevin Graves as an Additional Plaintiff at p. 2.) Since Graves has not yet been denied permission to hold the AFS demonstra- tion, the Court doubts whether his dispute with Penn State is sufficiently ripe for the Court to adjudicate his claim. However, the Court will not dismiss Brubaker’s and Wingert’s claims on mootness grounds. Graves’s claims will not materially alter the facts of this dispute and the Court will today dismiss the entire lawsuit. Therefore, the Court will consider the facts in the light most favorable to Graves and will grant Plaintiffs’ motion that Graves be ad- ded as an additional Plaintiff. Graves’s claims will be treated as identical to those of Brubaker and Wingert. The definition of mootness is well settled: A case is moot when the issues presented are no longer “live” or the parties lack a legally cognizable interest in the outcome of the lawsuit. Powell vs. McCormack, 395 U.S. 486, 496 (1969). Despite this definition, a claim is not moot even though the alleged violation is not presently in force or continuing, where the alleged violation or challenged con- duct is capable of repetition, yet evading review. Southern Pacific Terminal Co. vs. ICC, 219 U.S. 498 (1911); Winsett vs. McGinnis, 617 F.2d 996, 1003 (3d Cir. 1980); cert. denied, sub nom., Anderson vs. Winsett, ____ U.S. ____. 101 S.Ct. 891 (1981). Where individual Plaintiffs are suing, and there is no class action, the capable of repeti- tion, yet evading review doctrine is limited to the situation where (1) a challenged action was in its duration too short to be fully litigated prior to its cessation or expiration, and (2) there was a reasonable expectation that the same com- plaining party would be subject to the same action again. Weinstein vs. Bradford, 423 U.S. 147, 148-49 (1975), citing Sosna vs. lowa, 419 US. 393 (1975). As defendants 12a point out in their reply brief, the “capable of repetition yet evading review” doctrine is inapplicable if there is no reasonable expectation that the same Plaintiffs will be sub- ject to the same policies again. (Defendants’ Reply Brief at p. 5). In order for the Court to grant summary judgment in favor of Defendants as to Plaintiffs Brubaker’s and Wingert’s claims, there must be no material issue of fact in dispute. As to Brubaker, Defendants claim there is no possibility that he will again be subject to Penn State’s policies because Brubaker has not applied for dormitory space in 1981 and all rooms have previously been assigned to students making timely applications. Thus, Defendants conclude Brubaker will no longer be able to reside in a dormitory room, so his claim is moot. However, Plaintiffs deny that the dormitories are filled for the 1981-82 school year, sO a material issue of fact exists as to whether Brubaker again will be able to live in a Penn State residence hall. Thus, a question remains as to whether Brubaker again will be subject to Penn State’s policies regarding commercial transactions in residence halls. Therefore, at least at this stage of the litigation, summary judgment may not be granted in Defendants’ favor as to Brubaker’s claims on mootness grounds. As to Plaintiff Wingert, Defendants claim that since he is no longer a student at Penn State and he has not filed an application for readmission to the school, Wingert too will no longer be residing in a Penn State dormitory room, so his claim is not capable of repetition. Again, there is a material issue of fact in dispute. Wingert, by affidavit, States that he intends to re-enroll in Penn State as soon as possible and intends to live in the Penn State residence halls. Thus, as with Brubaker, Wingert’s claims cannot be disposed of in Defendants’ favor on mootness grounds, at least at this stage of the litigation. 13a Defendants are entitled to summary judgment as to Brubaker and Wingert on other grounds. Brubaker and Wingert seek relief permitting them to invite AFS representatives to common areas in the individual dor- mitory rooms, to conduct sales demonstrations to groups of invited students in their rooms and in common areas of residence halls, and to invite AFS personnel to their dor- mitory rooms for the purpose of consummating sales of goods to other students following the demonstrations. Brubaker and Wingert were not parties to American Future Systems I, and are not bound by the doctrine of res judicata by the decision in that case. However, American Future Systems I constitutes binding legal precedent in- sofar as the legal issues involved are concerned. This Court in American Future Systems I did not address the question of First Amendment rights of Penn State students who are desirous of receiving information about the products which AFS sells and concluded that AFS did not have standing to assert the rights of those students. American Future Systems I, 464 F.Supp. at 1259. AFS again raised the claim that the First Amendment rights of Penn State students were being violated by Penn State’s policy with regard to commercial activities within dor- mitories on its appeal in American Future Systems I. The Court of Appeals, addressing that claim, stated that “[t}he analysis contained in the text [of American Future Systems 1} concerning the legitimacy of the restriction on AFS group sales in the residence halls applies as well to students who desire to purchase AFS products at group meetings. Also, we reiterate that the Penn State policy does allow an individual student to invite a sales representative into his or her room for the purpose of individually purchasing goods.” American Future Systems I, 618 F.2d at 257, n. 16. To the extent that Brubaker and Wingert base their First Amendment claims on the right to conduct the same l4a types of demonstrations and sales that AFS seeks to con- duct, they stand in no different position than AFS itself did in American Future Systems I. Indeed, Plaintiffs are in agreement with this position, stating that the student Plaintiffs’ commercial free speech rights as listeners are reciprocal to AFS’s rights, and American Future Systems I controls. (Plaintiffs’ Brief in Opposition to Defendants’ Motion for Summary Judgment at p. 13.) Since the Court of Appeals in American Future Systems I upheld the validity of Penn State’s policy with regard to commercial activities in dormitories, and since Brubaker and Wingert stand on the same footing as did AFS, Peni State’s policies do not violate Brubaker’s and Wingert’s First Amendment rights of commercial speech and Defendants will be granted summary judgment on this issue. Brubaker and Wingert also assert that Penn State’s regulations unconstitutionally inhibit their right of freedom of association arising under the First Amend- ment. Brubaker and Wingert claim that they have a fun- damental right to associate themselves with one another and with AFS representatives in the setting of a group demonstration of AFS merchandise where all of them have the opportunity to hear and exchange information and views relating to AFS products, the effectiveness and fairness of the presentation, relevant price information, and also to consummate sales, if any one so chooses. (Plaintiffs’ Brief in Opposition to Defendants’ Motion for Summary Judgment at pp. 17-18). Brubaker and Wingert claim that Penn State’s regulations infringe upon those associational rights. Brubaker and Wingert also claim that since the private dormitory room serves as a student’s “home away from home,” and the rooms are essentially equivalent to the “interior of a private home,” the state lacks the power to control legal, non-destructive, freely formed associations within such rooms. (Plaintiffs’ Brief lSa in Opposition to Defendants’ Motion for Summary Judg- ment at p. 19.) Plaintiffs conclude that since Penn State has failed to demonstrate a compelling state interest to sustain enforce- ment of its regulation on commercial activities in the dor- mitories, Penn State’s regulations must fall. While Plaintiffs make the argument that their associa- tional rights stand on some different footing than their right as recipients of commercial speech, the Court is unpersuaded by this distinction. Indeed, as set forth in the Complaint, these associational rights are indistinguishable from the rights sought with respect to making group demonstrations and sales in dormitory rooms. In Count III of the Complaint, Plaintiffs list in broadside fashion their rights that have allegedly been violated: “[D]efen- dants have deprived said Plaintiffs of their rights of freedom of speech, privacy, and association under the constitution of the United States.” Certainly, the primary purpose of the demonstrations is to encourage the at- tendees at the shows to purchase, merchandise. See American Future Systems I, 464 F.Supp. at 1258 (€ 58). The Court finds unpersuasive Plaintiffs’ argument that since the Court of Appeals stated that Penn State had only a “legitimate interest” in continued enforcement of its regulations and not a “compelling interest” Brubaker’s and Wingert’s associational rights have been violated. (Plain- tiffs’ Brief in Opposition to Defendants’ Motion for Sum- mary Judgment at p. 20.) Where political-type relation- ships are impinged upon by regulation of the right to association, such regulation must be supported by a com- pelling state interest. E.g. NAACP vs. Alabama, 357 U.S. 449, 460 (1958). (Whether the beliefs sought to be advanc- ed are political, religious, economic or cultural is im- material). As is the case with commercial speech, commer- 16a cial associational rights, even those which are economical- ly motivated, are afforded some protection under the First Amendment. E.g. International Union vs. National Right to Work Legal Defense & Education Foundation, 590 F.2d 1139, 1148 (D.C. Cir. 1978). The Plaintiffs cite no authority for the proposition that commercial associa- tional rights such as those which are at issue in this case are on equal footing with political associational rights. Quite to the contrary, the relationship Setween political and commercial associational rights is analogous to the rela- tionship between political and commercial speech rights. As the Supreme Court held in Ohralik vs. Ohio State Bar Association, 436 U.S. 447, 455-56 (1978), commercial and political activities must be treated differently. We have not discharged the “common sense” distinction between speech proposing a commer- cial transaction, which occurs in an area tradi- tionally subject to government regulation, and other varieties of speech . . . . To require a pari- ty of constitutional protection for commercial and non-commercial speech alike would invite dilution, simply by a levelling process, of the force of the [First] Amendment’s guarantees with respect to the latter kind of speech. Rather than subject the First Amendment to such a devitalization, we instead have afforded com- mercial speech a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values, while allowing modes of regulation that might be im- permissible in the realm of non-commercial ex- pression. In Ohralik, the Court expressly held that commercial associational rights, while entitled to some constitutional protection, are subject to regulation in furtherance of im- 17a portant state interests. 436 U.S. at 458-59. See Central Hudson Gas & Electric Corp. vs. Public Service Commis- sion of New York, ____ U.S. ___, 100 S.Ct. 2343 (1980); Virginia State Board of Pharmacy vs. Virginia Citizens Consumer Counsel, 425 U.S. 748 (1976). The Court of Appeals has already held in American Future Systems I that legitimate and important interests of Penn State are furthered by its policy of governing com- mercial activity in the dormitories. Penn State asserts that AFS group sales significantly affect the primary activities of college dormitories. Penn State argues that its residence halls are exclusively dedicated to providing a living en- vironment which is conductive to activities associated with being a student and succeeding academically and that AFS’s activity within the residence halls will disrupt the proper study atmosphere and privacy of students. These interests are important enough to sustain Penn State’s policy as against a challenge based on the right of associa- tion. American Future Systems I, 618 F.2d at 256-57. Moreover, the Court fails to see how the restrictions im- posed on Brubaker and Wingert infringe in any material way on the right to associate. As indicated above, Brubaker and Wingert may engage in sales demonstrations in common areas, and may consummate sales in the rooms of people purchasing the products. Brubaker and Wingert are of course free to conduct more extensive commercial activities at locations other than the dormitory halls of Penn State. Given the close nexus between associational freedoms and freedom of speech, NAACP va. Alabama, 357 U.S. 449, 460 (1958)), Brubaker and Wingert cannot demonstrate that the policy governing commercial activity violates their associational rights. The Defendants will therefore be granted summary judgment on this issue. 18a Brubaker and Wingert also claim that Penn State’s regulations impermissibly infringe on their constitutional right of privacy, which they assert requires that they be permitted to conduct the commercial activity they desire in the dormitory rooms. Brubaker and Wingert state that they seek to establish their rights to be let alone in their choice of whom they may invite to their rooms, or whom they choose to visit, in a lawful, nondisruptive manner. Brubaker and Wingert argue that because the privacy and associational rights are so closely intertwined in this case, if the regulations cannot withstand scrutiny with respect to associational claims, the regulations must fall on privacy grounds for the same reasons. (Plaintiff's Brief in Opposi- tion to Defendants’ Motion for Summary Judgment at pp. 23-24.) The Court agrees with these Plaintiffs’ statement that privacy and associational rights should be treated equally in this case, but concludes that neither associa- tional nor privacy rights have been violated. See Ohralik vs. Ohio State Bar Association, 436 U.S. 447, 455-56 (1978). While the genesis of privacy rights is somewhat obscure, Griswold vs. Connecticut, 381 U.S. 479 (1965), a fun- damental right to be free from unwanted governmental in- trusions is implicit in the constitution. Roe vs. Wade, 410 U.S. 113 (1973); Stanley vs. Georgia, 394 U.S. 557, 564 (1965). It is equally true that the constitutional right of privacy extends to a college dormitory room, Piazzola vs. Watkins, 442 F.2d 284, 289-90 (Sth Cir. 1971), as a college dormitory room is the equivalent of a student’s “home away from home,” American Future Systems I, 464 F.Supp. at 1262, and dormitory rooms are compared with the “interior of a private home,” Brush vs. Penn State, 489 Pa. 243, 414 A.2d 48, 51 (1980). The fact that students have privacy interests in their dor- mitory rooms, however, merely begins the inquiry. The 19a Supreme Court has recognized two kinds of privacy that are constitutionally protected. The first protects the in- dividual from disclosure of certain matters and the second protects the individual from unwarranted governmental intrusion when the individual seeks to make certain per- sonal decisions. Whalen vs. Roe, 429 U.S. 589, 599-600 (1977). Only the latter interest is relevant in this case. That interest, however, has been restricted to so-called fun- damental matters “relating to marriage, procreation, con- traception, family relationships, child rearing, and educa- tion.” Paul vs. Davis, 424 U.S. 693, 713 (1976). The Plain- tiffs, in apparent recognition of the fact that privacy rights established by Supreme Court decisions do not extend to the facts of this case, state that “the fact that certain aspects of the student-plaintiffs’ privacy claims have not previously been considered and recognized by the Supreme Court does not preclude such recognition, by this Court.” (Plaintiffs’ Brief in Opposition to Defendants’ Motion for Summary Judgment at p. 24.) This case does not involve some intrusion into Brubaker’s and Wingert’s ability to make decisions about personal matters of a fundamental nature; nor does Penn State’s policy preclude personal relationships, since it affects only relationships for com- mercial purposes at certain locations. Further, it is not ap- parent how the shifting of a group demonstration from a dormitory room to a common area imposes any infringe- ment at all upon Brubaker’s and Wingert’s freedom of thought, action, or belief. Moreover, any conception that privacy doctrines include the right to invite ten or more persons into one’s room for a commercial demonstration is inconsistent with the notion of the “right of privacy” under Supreme Court case law. For these reasons, the Court declines Plaintiffs’ invitation to expand the right of privacy in this case. Since Defendants have shown that, as a matter of law, Plaintiffs’ right of privacy has not been violated by Penn State’s policy regarding commercial ac- 20a tivities in dormitories, Defendants will be granted sum- mary judgment as to this aspect of the case. Brubaker and Wingert also claim that Penn State’s policies abridge their rights under Pennsylvania Landlord and Tenant Law. Under § 504-A of the Landlord-Tenant Act, 68 P.S. § 250.554 (Supp. 1981), a tenant has the right to invite to his apartment or dwelling units such employees, business visitors, tradesmen, deliverymen, suppliers of goods and services, and the like as he wishes. Further, the tenant has the right to invite to this dwelling for reasonable periods of time social guests, family members and visitors. “It is the intent of this article to in- sure that the landlord may in no way restrict the tenant’s right to purchase goods, services and the like from the source of the tenant’s choosing . . .” 68 P.S. § 250.554. There is some controversy as to whether Pennsylvania’s Landlord-Tenant Act is app. ible to Penn State’s dor- mitories. Even assuming that ‘..e Act is applicable to Penn State’s dormitories, Brubaker and Wingert have not demonstrated that Penn State’s regulations with regard to commercial activities in its dormitories violates the Act. Penn Staie does not prohibit Brubaker and Wingert from inviting an AFS representative to their rooms to make a sale. Penn State also does not prohibit Brubaker and Wingert from having social guests in their dormitory rooms. No reasonable construction of the Landlord- Tenant Act leads to the conclusion that Brubaker and Wingert are permitted to engage in broad commercial transactions in Penr: State’s dormitories. Thus, as a matter of law, Brubaker’s and Wingert’s rights under Penn- sylvania’s Landlord-Tenant Act have not been violated. Summary judgment will therefore be granted to Defen- dants on this issue. 2la Ill. Plaintiff's DelValle, Varsics, Habacher, and Spiller. DelValle, Varsicks, Habacher and Spiller are Penn State students who do not reside in Penn State residence halls. They seek an order permitting them to attend and par- ticipate in AFS group presentations in common areas and dormitory rooms and to consummate sales from AFS in those rooms. (Complaint, Count IV.) These Plaintiffs were allegedly invited by Brubaker and Wingert to attend AFS demonstrations in private dormitory rooms. When Penn State ordered that these demonstrations not take place, on the ground that they were violative of Penn State’s regulations regarding commercial activities in dor- mitories, these Plaintiffs claimed that their right to attend those demonstrations was violated. In American Future Systems I, the Court of Appeals recognized that the First Amendment rights of the reci- pients of commercial speech are co-extensive with those of the speaker. American Future Systems I, 618 F.2d at 257 and 257 n. 16. The restriction on these Plaintiffs’ ability to engage in commercial activity is even less than that placed on Brubaker and Wingert. The non-resident Plaintiffs are able to participate in an AFS demonstration in a common area of the residence hall but not in a dormitory room. Moreover, they might consumate a purchase of AFS goods anywhere except in a residence hall. It is presumed that Penn State cannot and does not prohibit these Plain- tiffs from inviting an AFS representative to their own dwellings for demonstrations and sales. Thus, the Court fails to see how Penn State’s regulations limiting commer- cial activities in its dormitories constitute any significant abridgement of these Plaintiffs’ rights of speech, privacy, and association. Since these Plaintiffs have available all the alternative means of access to information about AFS products, the inconsequential restrictions imposed by 22a Penn State’s regulations cannot be considered to be viola- tions of these Plaintiffs’ First Amendment rights. Linmark Associates, Inc. vs. Willingboro, 431 U.S. 85, 93 (1977). Reid vs. Barrett, 467 F.Supp. 124, 128 (D. N.J. 1979), aff'd 615 F.2d 1354 (3d Cir. 1980); Connecticut State Federation of Teachers vs. Board of Education Members, 538 F.2d 471, 479 (2d Cir. 1976). Defendants are therefore entitled to summary judgment as to these Plaintiffs’ claims. IV. Arbitrary Enforcement of Penn State’s Regulations. Plaintiffs’ final claim is that Defendants in violation of Plaintiffs’ due process rights, have not enforced the challenged regulations in an even-handed, fair, and non- arbitrary manner. Plaintiffs argue in support of their due process claim that Wolff vs. McDonnell, 418 U.S. 539, 558 (1974), stands for the proposition that “the touchstone of due process is protection of the individual against ar- bitrary action of government.” See also Chung vs. Park, 514 F.2d 382, 387 (3d Cir. 1975). As Plaintiffs admit, “of course, the predicate of a due process claim is governmental violation of a person’s liber- ty interest.” (Plaintiffs’ Brief in Opposition to Defendants’ Motion for Summary Judgment at p. 26, adopting Plain- tiffs’ Memorandum of Law in Support of Motion for a Preliminary Injunction at pp. 34-35.) It is certainly the case that were it established that Plaintiffs’ constitutional rights of free speech, association and privacy were violated by Penn State’s enforcement of its regulation regarding commercial activity in dormitories, this violation of Plain- tiffs’ rights would be within the zone of protected interest under the Fourteenth Amendment. E.g. Madera vs. Board of Education, 386 F.2d 778, 783-84 (2d Cir. 1967), cert denied, 390 U.S. 1028 (1968), citing Allgeyer vs. Loui- 23a siana, 165 U.S. 578 (1897). However, the Court has found that Penn State’s enforcement of its dormitory regulations does not violate any of Plaintiffs’ collective constitutional rights or rights under Pennsylvania state law. Thus, even if Penn State’s regulations were enforced in an arbitrary manner Plaintiffs’ due process rights would not have been violated. In addition, Plaintiffs’ complaint and supporting af- fidavits over insufficient facts to support a claim of discriminatory enforcement of Penn State’s policies. In this circuit, civil rights complaints must set forth facts with specificity, Rotolo vs. Borough of Charleroi, 532 F.2d 920, 922 (3d Cir. 1976), and this complaint fails to do so. Plaintiffs, in a conclusory manner, in Count II of their complaint, state that “by enforcing their stated policy, which purports to exclude from university residence halls all persons seeking to demonstrate or sell merchandise, in an arbitrary, capricious, selective, discriminatory, and unreasonable manner, Defendants have deprived Plain- tiffs of their rights to due process under the Fourteenth Amendment of United States Constitution.” (Complaint, Count II). The sole evidence now advanced in support of its allegation is the affidavit of Joseph Healey, which states in part: Ms. Peterson explained that the University can- not monitor the residence halls at all times. Therefore, there may be illegal presentations go- ing on that the University does not know about. However, when the university becomes aware of an illegal presentation through a student com- plaint or other means, they enforce the rule. This hardly establishes arbitrary and capricious enforce- ment of Penn State’s policies. Indeed, it appears to establish consistent enforcement of the policies as soon as 24a the university is made aware of violations of its rules. Since Plaintiffs have failed to state a claim upon which relief can be granted with respect to this due process claim, summary judgment will be granted in Defendants’ favor on this issue. V. Conclusion. The Plaintiffs have not established that Penn State’s en- forcement of its regulations with regard to commercial ac- tivity in its dormitories violates any of the Plaintiffs’ con- stitutional rights or rights under Pennsylvania state law. Since there is no dispute of any material issue of fact in this case, Defendants’ motion for summary judgment will be granted. An appropriate order will be entered. MUIR, U.S. District Judge DATED; September 16, 1981 25a UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA AMERICAN FUTURE SYSTEMS, INC., et al., : Plaintiffs : Civil No. 81-0171 vs. : Complaint Filed : 2/5/81 THE PENNSYLVANIA STATE : (Judge Muir) UNIVERSITY, et al., : Defendants OPDER 1. Graves’s motion to be joined as an additional Plain- tiff is granted. 2. Defendants’ motion for summary judgment is granted. 3. The Clerk of Court shall enter judgment in favor of all Defendants and against all Plaintiffs. 4. The Clerk of the Court shall close this file. MUIR, U.S. District Judge DATED: September 16, 1981 26a APPENDIX B UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 81-2674 AMERICAN FUTURE SYSTEMS, INC., STEVEN BRUBAKER, RICHARD J. WINGERT, W. BRUCE DEL VALLE, JOAN D. VARSICS, DENNIS C. HABECKER, KEVIN GRAVES and JOHN B. SPILLAR, Appellants v. THE PENNSYLVANIA STATE UNIVERSITY, BOARD OF TRUSTEES OF THE PENNSYLVANIA STATE UNIVERSITY, JOHN W. OSWALD, and M. LEE UPCRAFT APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA (D.C. Civil No. 81-0171) Argued April 2, 1982 Before: GIBBONS, SLOVITER and BECKER, Circuit Judges (Filed August 9, 1982) Henry T. Reath (Argued) George E. Pierce, Jr. Duane, Morris & Heckscher One Franklin Plaza Philadelphia, PA 19012 Attorneys for Appellants 27a Virginia Lynn Hogben 2600 The Fidelity Building Philadelphia, PA 19109 Attorney for Amicus Curiae American Civil Liberties Foundation of Pennsylvania Carl N. Martin, II 1135 Land Title Building Philadelphia, PA 19110 Attorney for Amicus Curiae Commonwealth Association of Students; Associated Students of Kansas; California State Student Association; Student Association of the State University of New York Ronald H. Sinzheimer 8 Elk Street Albany, New York 12207 Attorney for Amicus Curiae Student Association of the State University of New York Delbert J. McQuaide P. Mark FAulkner (Argued) McQuaide, Blasko, Schwartz, Fleming & Faulkner, Inc. 811 University Drive State College, PA 16801 Attorneys for Appellees OPINION OF THE COURT SLoviTeER, Circuit Judge. Plaintiff American Future Systems, Inc. (AFS) filed suit against Pennsylvania State University, its trustees and agents (jointly referred to as Penn State) alleging that Penn State’s application of its policies relating to commer- 28a cial activities in the common areas of its student residence halls violated its First and Fourteenth Amendment rights to free commercial speech as established by this court in an earlier opinion. Several students at Penn State also joined as plaintiffs alleging that Penn State’s policies with regard to activities in the common areas and in the dormitory rooms violated, inter alia, their noncommercial free speech rights and right to privacy. Plaintiffs appeal the district court’s grant of defendants’ motion for summary judgment. We reverse and remand. I. BACKGROUND AFS is a corporation which engages in the sale of cookware, crystal, and tableware through demonstrations of its merchandise at colleges throughout the United States. These demonstrations are attended by a student hostess, invited guests and a sales representative. Four of the student plaintiffs, Bruce Del Valle, Joan D. Varsics, Dennis C. Habecker and John B. Spillar, are current Penn State students who do not reside in the University residence halls. Plaintiff Keven Graves is a Penn State stu- dent who currently resides in the residence halls. Plaintiffs Steven Brubaker and Richard J. Wingert were living in the University residence halls at the time the action was filed. ' It is conceded that as long as one plaintiff is a student who resides in the residence halls to which the contested regula- tions apply, the issues are properly before us. ‘Wingert withdrew from Penn State in February 1981. Brubaker is still a student at Penn State, but no longer resides in the residence halls. 29a In the prior opinion rendered in the earlier action brought by AFS we described Penn State’s policies and regulations covering commercial activities in its dor- mitories in detail. See American Future Systems, Inc. v. Pennsylvania State University, 618 F.2d 252 (3d Cir. 1980) (American Future Systems I). These regulations and policies have not changed to any sign ficant extent. App. at 322a. In summary, the student housing contract pro- vides “[t}he conducting of any business enterprise for per- sonal profit is prohibited in or around the university operated units.” The student handbook states: “The institution... has rights and respon- sibilities of its own. The rights and respon- sibilities of the institution include: ... [the] {[rlight to prohibit individuals and groups who are not members of the University community from using its physical and operating facilities for commercial . . . activities.” “Lectures, conceris, demonstrations, displays, or exhibits may not be used in any manner as a means of promoting commercial companies, products, or services.” “The word ‘commercial’ . . . means any activity or event which results in personal financial gain to the peddler or organization thereof, provided that contact between a peddler and a student shall not be deemed commercial if such contact was invited by the individual student involved.” “Persons who are not students or employees of the University, while on University property, are required to . . . abide by University policies and regulations.” 618 F.2d at 253 (citations omitted). 30a Penn State’s interpretation of these policies and regula- tions as relevant to the issues in this case is set forth in its brief as follows: “Under that policy, AFS may conduct group demonstrations of its products in common areas of Penn State residence halls. No solicitation of sales or sales may occur in those demonstrations. Following that demonstration, or by direct mail or telephone, AFS may secure invitations from a student to solicit sales and sell merchandise to that student in his or her dormitory room.” Brief of Appellees at 5.2 AFS challenges the man- ner of application of the regulation to the demonstrations in common areas of the residence halls. The student plain- tiffs challenge the preclusion of demonstrations in the dor- mitory rooms. The issues will be considered separately. Il. AFS’S CHALLENGE In American Future Systems I, AFS had challenged Penn State’s regulation of group commercial activities in the residence halls. AFS had conducted and scheduled future demonstrations in the residence halls of Penn State. As part of such demonstrations, AFS conducts other solicitation activity including door-to-door visits accom- panied by the student hostess to seek guests for the ?In American Future Systems I, 464 F. Supp. 1252, 1256 (M.D.Pa. 1979), the district court found that: A sales demonstration put on by American Future Systms generally proceeds in two parts: A demonstration of the American Prestige Series products including a com- parison of those products with other merchandise and an explanation of why American Prestige products are superior, and a sales portion where interested students are given an opportunity to purchase products on an install- ment plan basis. 3la demonstration. The demonstrations were halted by University officials because they violated the policy bann- ing commercial activity. “When AFS protested that it had a constitutional right to solicit sales within the residence hall, a Penn State official told AFS that it would be per- mitted to conduct the demonstration portion of its show if no attempts were made to sell merchandise to the students during the presentation. AFS rejected that arrangement, stating that the sales portion was absolutely crucial.” 618 F.2d at 254 (footnote omitted). In affirming the judgment entered in Penn State’s favor, we emphasized that Penn State had not “totally suppressed” commercial speech, but “merely restricted that speech somewhat.” Jd. at 258. We stressed that “not only is AFS free to sell its goods elsewhere than in the residence halls, it can even enter those halls, upon invitation, and set up group demonstra- tions of its products. All that it is restricted from doing is actually completing in those halls its desired commercial transactions.” Jd. at 259. Shortly thereafter, AFS requested that Penn State per- mit it to conduct group demonstrations in individual students’ rooms. App. at 20a. Under its proposed scheme actual consummation of sales would occur in the pur- chaser’s own room on a one-on-one basis. Penn State re- jected this proposal on the ground that such activity would not conform with University policy. Jd. at 22a.’ AFS 4In a letter dated October 3, 1980, counsel for Penn State explained the reason or rejecting AFS’ proposal as follows: Generally speaking, requests [to conduct group demonstrations in the public areas of the dormitories} are honored where the “demonstration” has educational value, does not interfere with the normal activity of the area and does not involve an outright solicitation of a commercial sale. The “demonstration” may result in the consummation of a commercial transaction if the student pursues the matter 32a then proposed that it be permitted to present group demonstrations in the common rooms of the residence halls. App. at 29. It forwarded to the University a copy of the printed text (consisting of 76 cue cards) of its proposed presentation and explained that the material contained in cards | through 67 would be presented in the group demonstration, whereas the material in the remaining cards would be “modified for a one on one closing transac- tion.” Jd. at 30a. Thereafter, University officials reviewed the cards and determined that although “the presentation does contain much material of an educational nature which would be permitted,” certain of the material con- tained “an outright group commercial solicitation which is contrary to University policy.” /d. at 69a. In a letter to AFS, dated November 20, 1980, Penn State’s counsel enumerated which material — primarily those cue cards at the place of business of the vendor or if the student in- vites the vendor to his or her room to meet on an individual basis. In addition, an individual student may invite a ven- dor to the student’s room, whether or not a “demonstra- tion” has occurred for the consummation of a commercial solicitation and sale with that student only. However, group “demonstrations” or group sales by commercial organizations, or other who are not residents, are not permitted in the private areas of the residence halls, including the rooms of the students. The purpose behind these distinctions is to try to achieve a balance between the personal needs of the individual stu- dent and the needs for privacy and maintenance of a prop- er study atmosphere for large numbers of students living in communal facilities. Although these distinctions may not be entirely logical, and although it may be difficult to tell the difference be- tween a “demonstration” and an outright commercial solicitation, the policy by an large has achieved its pur- pose. App. at 26a-27a. 33a containing price, guarantee and payment plan information — was not permissible.”* In this action for injunctive and declaratory relief, AFS seeks an order “requiring the University to comply with this court’s prior interpretation of the effect of its regula- tions” and thus to allow AFS to present uncensored group demonstrations in the common areas of the residence halls upon invitation by a resident student and to consummate sales on a one-on-one basis with a student who has invited an AFS representative back to his or her private dormitory room. The district court denied plaintiffs’ motion for a preliminary injunction without a hearing, American Future Systems, Inc. v. Pennsylvania State University, 510 F.Supp. 1983 (M.D. Pa. 1981), and subsequently, again without giving plaintiffs a hearing, granted Penn State’s motion for summary judgment. American Future Systems, Inc. v. Pennsylvania State University, 522 F.Supp. 544 (M.D. Pa. 1981). AFS argues that Penn State’s refusal to allow it to pres- ent uncensored sales demonstrations in the common areas of University residence halls is violative of its First Amendment rights and contrary to this court’s prior inter- pretation of what commercial activity Penn State may per- missibly prohibit in its residence halls. The district court “The letter stated that “the material starting with the bottom paragraph of card 14 through the second paragraph on card 18 is not permissible because cooking by students, or anyone else, is not permit- ted in the residence halls.” App. at 69a. The letter also rejected the material on cards 24-31 (relating to the price of AFS’s china and guarantee and payment plans offered to students); the first paragraph of card 37 (relating to the price of AFS’s crystal); cards 52-65 (relating to the price of AFS’s cookware and package plans, guarantee and pay- ment plans, and tlic Florida holiday drawing); and “those portions of cards 66-67 which involve the distribution of contracts to the group.” Id. 34a rejected these contentions primarily on the ground that they were barred by the doctrine of res judicata. It con- strued AFS’s claims as an attempt to relitigate claims which either were advanced and decided in the first action or which could have been advanced. 522 F.Supp. at 548. It rejected AFS’s claim that the University’s attempt to cen- sor its sales demonstrations was violative of the First Amendment on the ground that this court had “specifical- ly upheld Penn State’s regulations to the extent they rested upon a distinction between commercial and non- commercial speech.” Jd. at 549. Finding that “the question of whether particular aspects of AFS’s presentations were educational or commercial” was not barred by res judicata, the district court independently examined the 67 cue cards at issue and found that those cards containing price, credit and guarantee terms constituted impermissi- ble solicitation. It therefore, upheld Penn State’s prohibi- tion of cards 24-31, the first paragraph of card 37, 52-65, and portions of cards 53-67. See note 4, supra. We disagree with the district court’s conclusion that the claims advanced by AFS in this appeal are barred by res judicata. At the time of our prior decision, there had been no attempt by the University to censor AFS’s sales demonstrations by prohibiting those portions of its demonstration containing information relating to the price of AFS’s products and the company’s credit and guarantee terms. The parties have agreed in oral argument before us that no issue as to the contents of the demonstration, as distinguished from the consummation of the transaction, was involved in the first action. It is important at the outset to clarify which issues are not before us. Although AFS construes our decision in American Future Systems I as having established its con- stitutional free speech right to conduct demonstrations of 35a a commercial product in common areas within the Univer- sity’s residence halls we do not read that opinion so broad- ly. Penn State has not sought to bar all commercial activi- ty from its residence halls. It has limited what ostensibly appears to be such a ban through its definition of “com- mercial” which excludes student contact with a peddler “if the contact was invited by the individual student involved.” Therefore we need not decide whether a state University may properly ban all commercial activity in its residence halls. Similarly, AFS does not challenge the distinction which the earlier opinion made between an ac- tual consummation or completion of the “commercial transaction” and a group demonstration of AFS’s pro- ducts. 618 F.2d at 258-59. Instead it seeks only to conduct the demonstration in the common areas without censor- ship of the contents of that demonstration. Finally, although the University has conceded that por- tions of the demonstration may have some educational value, and it and the district court sought to draw the line between those portions of the demonstration which they deem educational and those portions which they deem commercial, it is unmistakable that the demonstration is geared to the sales of the products and represents commer- cial speech.‘ Thus the only issue is whether Penn State may censor the content of AFS’s commercial speech con- ducted in the dormitory common rooms where AFS has been permitted by the University to conduct its sales demonstrations. ‘It may be wishful thinking to assume that most student guests at- tend the demonstrations for their educational value. Students are told in advance that those who attend are eligible to participate in the drawing of a winner of a four-day vacation in Florida. See American Future Systems I, 618 F.2d at 254. 36a The principle that commercial speech is protected from unwarranted government interference by the First Amend- ment, as applied to the states through the Fourteenth Amendment, was established in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976). That protection extends to price in- formation as well as advertising. See Bates v. State Bar of Arizona, 433 U.S. 350 (1977). Commercial speech, however, allows greater regulation than non-commercial speech, Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 455-56 (1978). In Central Hudson Gas & Electric Corp. v. Public Ser- vice Commission, 447 U.S. 557, 566 (1980), the Supreme Court summarized the constitutional test for restrictions on commercial speech as follows: For commercial speech to come within [the First Amendment], it at least must concern lawful ac- tivity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regula- tion directly advances the government interest asserted and whether it is not more extensive than is necessary to serve that interest In Ad World, Inc. v. Township of Doylestown, 672 F.2d 1136, 1139 n. 6 (3d Cir.), cert. denied, 102 S.Ct. 2240 (1982), we stated that advertisements may be regulated to insure their truthfulness and to prevent harm to the public. See also Beneficial Corporation v. F.T.C., 542 F.2d 611, 1619 (3d Cir. 1976), cert. denied, 430 U.S. 983 (1977), (“the remedy for the perceived violation can go no further in im- posing a prior restraint on protected commercial speech than is reasonably necessary to accomplish the remedial objective of preventing the violation”). 37a In the instant situation, there has been no allegation that AFS’s commercial speech activities are fraudulent, misleading or otherwise unlawful. As the Supreme Court emphasized in Central Hudson: The limitation on expression must be designed carefully to achieve the State’s goal. Compliance with this requirement may be measured by two criteria. First, the restriction must directly ad- vance the state interest involved; the regulation may not be sustained if it provides only ineffec- tive or remote support for the government’s pur- pose. Second, if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restrictions cannot survive. 447 U.S. at 564. We, therefore, must first determine whether the University has advanced a substantial government interest to be achieved by the restrictions at issue. The only interest ad- vanced by Penn State for precluding information on the price of the company’s products and the nature of the con- tract it enters into with purchasers is that asserted in the prior action before this court — i.e. its interest in main- taining the proper study atmosphere in its dormitories and in protecting the privacy of the students residing in those facilities. Restrictions on the contents of the demonstra- tion as distinguished from the conduct of the demonstra- tion cannot further these interests. The Supreme Court cases provide ample precedent for the proposition that price information has value. See Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., U.S. at 364. The University does not contend that the mere act of convening a group in the common areas of the residence halls is inimical to the study atmosphere since its 38a policy permits such group activity. We conclude thai Penn State has failed to show a substantial state interest, much less a plausible explanation, for its policy differentiating between the nature of the information contained in the AFS demonstration. We therefore reverse the summary judgment entered in Penn State’s favor. III. STUDENT'S CLAIM The claims of the students vary from that asserted by AFS. In January 1981, plaintiffs Wingert and Brubaker each informed the University that, with the consent of their roommates, they would be hosting a group demonstration of AFS products in their individual dor- mitory rooms. App. at 71a, 73a. Plaintiffs Del Valle, Var- sics, Habecker, and Spillar were invited and planned to at- tend the group demonstrations. Penn State informed both Wingert and Brubaker that they would not be permitted to host such presentations in their dormitory rooms, but would be allowed to host the demonstration in a common room of the residence hall if the demonstration did not in- volve “a solicitation to purchase or a sale of any products.” Jd. at 72a, 74a. A common room was reserved by the University for each student’s use. Jd. The students joined this action, seeking relief permitting them “(1) to make purchases in a group setting, if they so desire, at a demonstration presented in a common room within the residence halls, and, in addition, (2) to host and par- ticipate in informational and sales demonstrations in a stu- dent’s private dormitory room, including the right to com- plete a sales contract at that time in the group setting or, at their option, to make a purchase at a later time in a private setting.” Appellants’ brief at 25. 39a The students’ claim directed to the distinction which the University makes between the demonstration and consum- mation of the transaction in the common areas is one that was before this court in American Future Systems I. In granting summary judgment against the student plaintiffs, the district court recognized that they were not parties to American Future Systems I and are not bound by the doc- trine of res judicata by the decision in that case. 522 F. Supp. at 551. Nonetheless, the court considered that our prior decision constitutes binding legal precedent insofar as the legal issues are concerned. We also are bound by the prior panel opinion. Internal Operating Procedures of the Third Circuit, Ch. VIII. C. (1980). Fairly read, the court in American Future Systems I sustained the validity of the distinction between the demonstration and the consumma- tion of the transaction, and it did so after considering not only AFS’s right to deliver the speech but the “students” rights to take part in the sales there.” See 618 F.2d at 257 n. 16. Therefore, the district court did not err in rejecting the students’ claims with respect to the demonstration in the common areas. The students also challenge the University restriction of the use to which they may put their dormitory rooms by preventing the group demonstrations. They invoke their rights to free speech, associational interests, privacy, due process, and section 504-A of the Pennsylvania Landlord Tenant Act. Each of these claims was rejected by the trial court in granting summary judgment for Penn State. We focus primarily on the students’ claimed right of free speech and associational interests. The students argue that they have established by af- fidavit that the primary reasons for desiring to participate in the AFS presentations were educational, social, and cultural rather than commercial, that the district court 40a failed to consider their noncommercial free speech rights, and that such rights deserve a higher level of protection than commercial speech. They claim that “the state must demonstrate a compelling state interest for the regulation” and that the regulation must be narrowly drawn. The Amicus American Civil Liberties Union argues that to the extent Penn State’s regulations prohibit students from gathering in their own dormitory rooms to hear AFS’s presentations, they violate the First Amendment because the “interest in protection of privacy and study at- mosphere, whatever its sufficiency as grounds for the university’s restrictions on use of the common rooms, does not meet constitutional requirements as a justification for prohibitions against students hearing commercial presen- tations in a student’s own room” American Civil Liberties Union Brief at 8. The district court does not appear to have considered the students’ associational and free speech rights in the ac- tivities in their dormitory rooms independently from the activities conducted in the common areas. In its argument before us, Penn State represented that all organized group activity is prohibited in the dormitory rooms and must be conducted in the common areas, and that this policy ap- plied to political as well as commercial activity. If this were the case, Penn State may indeed have a satisfactory reason for distinguishing between group activity in in- dividual dormitory rooms and in common areas which can be observed by others. Such reasons may relate to the safe- ty and well being of the students and the facility by which their security can be protected. The difficulty is that on this record we do not know whether there is a blanket pro- hibition against all organized group activity, and there have been no findings made by the district court as to the basis for such a prohibition. 4la It is undisputed that even speech entitled to the highest First Amendment protection may be subject to reasonable time, place, and manner regulations that are content- neutral, serve a significant governmental interest, and that leave open ample alternative channels for communication of the information. Heffron v. International Society for Krishna Consciousness, Inc., 452 U.S. 640, 647-48 (1981). In this case the absence of any record on this issue and any findings by the district court makes this an inappropriate case for summary judgment. The University’s reliance on the need to preserve a study atmosphere, asserted also in defense cf this regulation, is unsupported by any evidence in this record and there is no basis to bind the students, who were not parties in the prior litigation, by any evidence which may be on record in that case. Therefore we will not speculate about the validity of the line drawn by the University between activity in the common areas of the dormitory and the dormitory rooms themselves. As the district court found, plaintiffs’ due process claim depends on finding some predicate right in the form of a liberty interest. Since the district court had rejected plain- tiffs’ proffered free speech right, it concluded there was no such liberty interest implicated. Since we have concluded that it was inappropriate to grant summary judgment against the student plaintiffs on this ground, it follows that the district court will need to reexamine the plaintiffs due process claim. At that time, plaintiffs may seek to amend the complaint to provide, if they can, the specifici- ty which the district court found lacking. Because we must remand this matter to the district court, we will also reach for its guidance the students’ con- tention that the Penn State policies violate their constitu- tional right to privacy which encompasses their right to receive visitors in their dormitory rooms and to be received 42a as a visitor in the privacy of a fellow student’s room. We have previously commented that “the full measure of the constitutional protection of the right to privacy has not yet been delineated.” United States v. Westinghouse Electric Corp., 638 F.2d 570, 577 (3d Cir. 1980). In Whalen v. Roe, 429 U.S. 589, 599-600 (1977) the Supreme Court referred to two types of privacy interests: “One is the in- dividual interest in avoiding disclosure of personal mat- ters, and another is the interest in independence in making certain kinds of important decisions.” The latter decisions have encompassed “matters relating to marriage, procrea- tion, contraception, family relationships, and child rear- ing and education.” Paul v. Davis, 424 U.S. 693, 713 (1976). Anu individual student’s right to privacy is not abrogated because the student has chosen to live in a University dormitory. On the other hand, the intimate per- sonal nature of the rights previously accorded privacy pro- tection is a far cry from the right asserted here, the right to host and attend a demonstration of cookware. We are un- willing to extend the constitutional right of privacy to commercial transactions completely unrelated to fun- damental personal rights and therefore affirm the district court’s rejection of that basis of plaintiffs’ claims.* *The district court rejected the claim of Brubaker, Wingert, and Graves that Penn State’s policies abridge their rights under § 504-A of the Pennsylvania Landlord and Tenant Act, 68 P.S. § 250.544. That section provides: The tenant shall have a right to invite to his apartment or dwelling unit such employees, business visitors, tradesmen, deliverymen, suppliers of goods and services, and the like as he wishes so long as his obligations as a tenant under this article are observed. The tenant also shall have right to invite to his apartment or dwelling unit, for a reasonable period of time, such social guest, family or visitors as he wishes so long as his obligations as a tenant under this arti- cle are observed. These rights may not be waived by any 43a For the foregoing reasons, we will reverse the grant of summary judgment for the defendants and will remand this matter to the district court for further proceedings consistent with this opinion. A True Copy: Teste: Clerk of the United States Court of Appeals for the Third Circuit provisions of a written rental agreement and the landlord and/or owner may not charge any fee, service charge or additional rent to the tenant for exercising his rights under this act. It is the intent of this article to insure that the landlord may in no way restrict the tenant's right to purchase goods, services, and the like from a source of the tenant’s choos- ing and as a consequence any provision in a written agree- ment attempting to limit this right shall be void and unen- forceable in the courts of this Commonwealth. The parties disagree as to whether this statute applies to Penn State’s dormitories and have referred us to no relevant Pennsylvania court decision construing this statute. Under these circumstances, and since the student’s claims may be resolved on the basis of other federal issues, it is unnecessary at this time to reach this issue. d4a APPENDIX C UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 81-2674 AMERICAN FUTURE SYSTEMS, INC., STEVEN BRUBAKER, RICHARD J. WINGERT, W. BRUCE DEL VALLE, JOAN D. VARSICS, DENNIS C. HABACHER, JOHN P. SPILLER, and KEVIN GRAVES, Appellants v. THE PENNSYLVANIA STATE UNIVERSITY, BOARD OF TRUSTEES OF THE PENNSYLVANIA STATE UNIVERSITY, JOHN W. OSWALD and M. LEE UPCRAFT, Appellees AMERICAN FUTURE SYSTEMS, INC., etc. et al., Appellants SUR PETITION FOR REHEARING Present: SEITZ, Chief Judge, ALDISERT, ADAMS, GIBBONS, HUNTER, WEIS, GARTH, HIGGINBOTHAM, SLOVITER, and BECKER, Circuit Judges The petition for rehearing filed by appellees, The Pennsylvania State University, Board of Trustees of The Pennsylvania State University, John W. Oswald and M. Lee Upcraft, in the above entitled case having been sub- mitted to the judges who participated in the decision of 45a this court and to all the other available circuit judges of the circuit in regular active service, and no judge who concurred in the decision having asked for rehearing, and a majority of the circuit judges of the circuit in regu- lar active service not having voted for rehearing by the court in banc, the petition for rehearing is denied. By the Court, Dated: September 21, 1982 OPINION SUR PETITION FOR REHEARING SLOVITER, Circuit Judge. Under ordinary circumstances, the petition for rehearing and for rehearing in banc filed by appellees (“Penn State”) which raises issues previously raised and rejected by an undivided panel of this court in its deci- sion would not warrant any comment in conjunction with the order denying said petition. However, because five members of this court have joined in a statement which does not suggest that the panel's statement of the law is incorrect, and have nonetheless voted for rehearing in banc notwithstanding our general policy to the contrary, see Internal Operating Procedures of the Third Circuit, Ch. VIII. B (1980), this may create some confusion when the case is remanded to the district court. Therefore a reiteration of the issues raised in the appeal, addressed in the opinion and decided by the court is called for. The statement of Judge Adams that the opinion in this case may cause state universities to “lose a signifi- cant portion of their control over commercial activity on their campuses” overstates the issue, the record and the opinion in this case. Neither in AFS I nor AFS II was this 46a court presented with the issue of the scope of a state uni- versity's power to close its residence halls to all commer- cial activity. The issue decided by the court in AFS I was the va- lidity of the distinction made by Penn State between the group demonstration and the consummation of sales. All of the parties, including counsel for Penn State, agreed at oral argument before this court that the issue of Penn State’s restriction on the content of the group demon- stration had not been raised or decided in AFS I. In AFS Il, the court was faced with that issue, the right of the University to review the material which AFS would present in the group demonstration and to prevent AFS from including material referring to price, guarantee and payment plans in its group demonstration. Since the restriction which Penn State has placed on AFS is a content-based restriction on the material that it may in- clude in its group demonstration, Judge Adams’ state- ment that “The primary restriction [placed on plaintiff] appears to be that sales may not be consummated in the common areas of a dormitory” is surprising. Further- more, a content-based restriction can hardly be charac- terized as a “minimal limit”. The suggestion implicit in Judge Adams’ statement that the opinion in AFS I] may narrow the range of op- tions open to a state university interested in resisting use of the school premises to promote sales of merchandise overlooks the significant fact that Penn State, for what- ever reason, has not resisted such sales. The record and the opinion in this case show that Penn State permits group demonstrations in common areas and consumma- tion of the commercial transaction in the individual stu- dents’ rooms. The district court granted summary judg- ment for Penn State on the challenge by AFS to Penn State’s actions in restricting the content of the group demonstrations in common areas and on the students’ challenge to the prohibition of group demonstrations in their dormitory rooms. AFS II held the summary judg- ment as to the AFS claim could not be upheld because 47a Penn State had “failed to show a substantial state inter- est, much less a plausible explanation, for its policy dif- ferentiating between the nature of the information contained in the AFS demonstration.” American Future Systems, Inc. v. The Pennsylvania State University, No. 81-2674, slip op. at 12 (3d Cir. August 9, 1982). It also held that there was no evidence in the record to justify the restriction with regard to the dormitory rooms be- cause Penn State had not introduced any relevant evi- dence in this case in that regard. Id. at 15. The opinion can hardly be considered to have enun- ciated either a new or disputed legal principle by requir- ing that a state university desirous of regulating com- mercial speech must show that such regulation furthers substantial state interests. In the most recent Supreme Court decision omitted from the series of cases referred to by Judge Adams, the Court cautioned that although a state may regulate commercial speech, “the First and Fourteenth Amendments require that they do so with care and in a manner no more extensive than reasonably necessary to further substantial interests.” The Court stated that states retain the authority to regulate adver- tising that “is inherently misleading or that has proven to be misleading in practice” and to promulgate “careful- ly drawn restrictions” which further other substantial state interests. In re R- M. J-, 102 S.Ct. 929, 939 (1982). See also Ad World, Inc. v. Township of Doylestown, 672 F.2d 1136, 1139 n.6 (3d Cir.), cert. denied, 102 S.Ct. 2240 (1982). The decision in this case leaves open to Penn State the opportunity on remand to produce evidence to show a substantial state interest to support its policy. In light of the incomplete record in this case and the preliminary stage at which this issue reached the court, it would ee preen ee Sony seneneeaty ve bee banc consideration of the abstract issue alluded to by [its Ried easiness osm Goakeet euee to resist commercial activity. 48a JUDGE ADAMS dissents from the denial of rehearing, and makes the following statement. Prior to 1975, commercial speech had no sanctuary in the First Amendment. Then in Bigelow v. Virginia, 421 U.S. 809 (1975), the Supreme Court held that the First Amendment protected the right of a Virginia news- paper to run advertisements which announced that abortions were legal in New York and offered the ser- vices of a New York referral agency. The statute in ques- tion banned all publications that prompted the procuring of an abortion. The court emphasized the great public interest in the subject matter. A year later, in Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976), the Court relied on Bigelow to hold that a Virginia statute that completely barred pharmacists from advertising the sale of prescrip- tion drugs was unconstitutional. A primary reason for this result was the Court’s concern that “the poor, the sick, and the aged” might be substantially disadvan- taged by this law. The lack of important information re- garding needed medication could seriously limit their “enjoyment of basic necessities [of life].” 425 U.S. at 763-64. The Supreme Court’s next decision in this area was Bates v. State Bar, 433 U.S. 330 (1977), which struck down an Arizona Supreme Court rule which completely prohibited any advertising by a lawyer. One of the essen- tial predicates of the Bates decision was that many citi- zens in Arizona and elsewhere were not obtaining legal assistance even when they needed counsel because of their fears regarding the price of such advice or because of their inability to locate a competent attorney. In Ohralik v. Ohio State Bar, 436 U.S. 447 (1978), the court ruled that a state may forbid in-person solicita- tion of prospective clients by lawyers for pecuniary gain, and noted the distinction between commercial and noncommercial speech. Speaking for the Court, Justice Blackmun said: 49a We have not discarded the “commonsense” distinc- tion between speech proposing a commercial trans- action, which occurs in an area traditionally subject to government regulation, and other varieties of speech. Virginia Pharmacy. To require a parity of constitutional protection for commercial and noncommercial speech alike could invite dilution, simply by a leveling process, of the force of the Amendment's guarantee with respect to the latter kind of speech. Rather than subject the First Amendment to such a devitalization, we instead have afforded commerical speech a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values, while allowing modes of regulation that might be impermissible in the realm of noncommercial [expression]. In our case, a governmental unit, here a state uni- versity, has not barred completely any advertising re- garding plaintiff's products. Nothing prevents the plain- tiff from communicating price information by placing signs on the school’s bulletin boards or mailing circulars to the students, or ever: coming on the premises and pre- senting their merchandise to the students. The primary restriction seems to be that sales may not be consum- mated in the common areas of a dormitory. Penn State apparently has attempted to implement this restriction by placing minimal limits on the format of the group demonstration. No one has shown the great need for permitting sales of merchandise to be conducted in this manner I have a serious question whether a reasonable reading of Bigelow, Virginia Pharmacy, Bates, and Ohralik can yield a conclusion that a state university is constitutionally limited to a narrow range of options in regulating third parties permitted on school premises to promote sales of merchandise. | believe this matter should be addressed by the entire Court and the subject 50a carefully considered before signals are sent to state uni- versities indicating that they may well lose a significant portion of their control ever commercial activity on their campuses. I am concerned that, unless the courts are prepared to step back and take a careful review of the precedents, the extension of a juridical concept by a dry and re- morseless logic can carry us to a position never contem- plated by the Supreme Court when this doctrine was first propounded. Moreover, it is a position totally incom- patible with our societal concerns.’ Judges Aldisert, Hunter, Weis and Garth join in this statement. A True Copy: Teste: Clerk of the United States Court of Appeals for the Third Circuit 1. As the Chief Justice has reminded us: “ ‘All rights tend to declare themselves absolute to their logical extreme. Yet all in fact are limited by the neighborhood of principles of policy which are other than those on which the particular right is founded... .’” United States v. 12 200-Ft Reels of Super 8 Mm. Film, 413 U.S. 123 (1973), quoting Hudson County Water Co. v. McCarter, 209 U.S. 349, 355 (1908) (Holmes, J.). Sla APPENDIX D UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA AMERICAN FUTURE SYSTEMS, INC., et al., : Plaintiff : Civil No. 78-262 vs. : Complaint Filed : 3/17/78 THE PENNSYLVANIA STATE : (Judge Muir) UNIVERSITY, et al., : Defendants APPEARANCES: For Plaintiff Joseph S. Finkelstein, Esq. Wolf, Block, Schorr and Solis-Cohen 12th Floor Packard Bldg. Philadelphia, Pa. 19100 For Defendants Grant H. Fleming, Esq. Delbert J. McQuaide, Esq. McQuaide, Blasko & Brown 811 University Drive State College, Pa. 16801 Richard Z. Freemann, Jr. Ballard, Spahr, Andrews & Ingersoll FILED 20th Floor, 30 S. 17th St. “aa Philadelphia, Pa. 19100 DONALD &. BERRY, Clert PER SE DEPUTY CLERK 52a UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA AMERICAN FUTURE SYSTEMS, INC., et al., : Plaintiff : Civil No. 78-262 vs. : Complaint Filed : 3/17/78 THE PENNSYLVANIA STATE : (Judge Muir) UNIVERSITY, et al., : Defendants OPINION MUIR, District Judge. 1. Introduction The Plaintiff, American Future Systems, Inc., a cor- poration whose principal business is the sale of cookware, china, crystal, and silverware to college women, brought this action against the Pennsylvania State University (Penn State), the Board of Trustees of that University, John W. Oswald, the President of Penn State, and M. Lee Upcraft, the Directors of Residental Life programs at Penn State, seeking a judgment declaring that Penn State’s ac- tions in banning American Future Systems representatives from the University Park Campus in the fall of 1977 were unconstitutional and requesting the Court to enjoin Penn State from enforcing its policy against commercial solicitation on the campus to preclude American Future Systems from selling its wares to Penn State students. The case was tried before the undersigned judge sitting with an advisory jury from January 5, 1979 to January 11, 1979. 53a The advisory jury answered a series of special verdict ques- tions indicating its belief that the sole purpose of American Future Systems’ visits to the Penn State campus was to sell its merchandise, that American Future Systems used gifts and other inducements as means of persuading Penn State students to invite their representatives on cam- pus, that American Future Systems had a policy of apply- ing different credit practices to freshmen and minority students than to upperclass Caucasian purchasers, that American Future Systems either concealed or failed to reveal certain information to persons in attendance at American Future Systems shows at which its wares were sold with respect to a Florida holiday drawing, and that American Future Systems was excluded from the Penn State Campus because it conducted commercial activities for profit rather than because of Penn State’s disapproval of either its credit practices or the “Florida holiday” draw- ing. The following represent the Court’s findings of fact, discussion, and conclusions of law. Il. Findings of Fact. 1. American Future Systems, Inc. is a corporation with a principal place of business at 715 Lancaster Avenue, Bryn Mawr, Pennsylvania, 19010. 2. Edward M. Satell is the President of American Future Systems. 3. Defendant John W. Oswald is the President of Penn- sylvania State University (Penn State). 4. M. Lee Upcraft is the Director of Residential Life Services at Penn State. 5. Penn State has adopted a policy with respect to fund raising on campus which is set forth both in the S4a terms, conditions, and regulations of the housing and food service contract for undergraduate residence halls and dining halls of the Pennsylvania State University (P5) and in the student handbook at page 82, ¢ 3, subsection (a)(8). 6. The terms, conditions, and regulations of the hous- ing and food service contract state on page 35 as follows: “The conducting of any business enterprise for personal profit is prohibited in or around the university-operated units.” 7. The student handbook at page 82, ¢ 3, sub-§ (a)(8) reads as follows: “Fund-raising activities are subject to the following restrictions: (8) Lectures, concerts, demonstra- tions, displays, or exhibits may not be used in any manner as a means of promoting commercial companies, pro- ducts, or services.” 8. In addition to regulating commercial sales, Penn State has adopted certain policies relating to solicitation, which is defined as donations or sales of products for the benefit of non-university charitable organizations, can- vassing, which is defined as any effort to influence student opinions specifically excluding solicitation or fund- raising, visitation of students in their rooms either by university or non-university individuals, and the manner by which students are permitted to have overnight guests in a residence hall. 9. Although Penn State prohibits the use of residence hall areas for the benefit of commercial organizations, an individual student who intends to purchase goods or ser- vices is permitted to invite a vendor of those goods or ser- vices to the residence hall for the purpose of transacting business with him. 55a 10. Penn State’s policy against commercial solicitation does not prohibit vendors from attempting to sell their merchandise to Penn State students by means of telephone communication directed into the residence halls. 11. The telephone numbers of students residing in a particular residence hall are available in the lobby of that building. 12. Members of the general public who have not been invited into a residence hall for a specific purpose may enter the lobby of a dormitory in order to examine the list of phone numbers. 13. A “no trespassing” sign is posted at or near the en- trance of each residence hall on the Penn State Campus. 14. The residence halls at Penn State contain a number of rooms ranging between 24 and 300 each and there are a total of 6,900 rooms on the University Park Campus. Residence hall facilities are reserved for the use of residence hall residents and their properly invited visitors or guests. 15. Most residence halls on the Penn State Campus have a study lounge designed to be occupied by three to 12 persons as well as other common areas, including bathrooms, storage rooms, and laundry rooms. 16. Any student living in the residence halls at Penn State signs a housing contract which states that he has read the terms and conditions regulating the use of such residence halls and agrees to abide by those terms. 17. The basis of Penn State’s policy against commer- cial activity within the residence halls is the view of the members of the Residential Life Services department that the proper study atmosphere and privacy of the students 56a would be impossible to maintain if commercial vendors were permitted to attempt to conduct sales activities within the residence halls. 18. Penn State’s policy against commercial activities on campus does not prevent commercial businesses from advertising in student newspapers or on student radio sta- tions. 19. There is no restriction placed by Penn State on the content of commercial items mailed to Penn State students by means of the United States mails. 20. American Future Systems is engaged in the business of selling cookware, china, crystal, and silver- ware to college-age women. 21. The sales activities of American Future Systems, Inc. which are relevant to this case relate to attempted sales of a selected number of patterns of china, crystal, silverware and cookware known collectively as the “American Prestige Series.” 22. American Prestige Series goods are generally sold at demonstrations or shows attended by the “hostess,” a “sales representative,” and a number of invited guests. 23. With respect to its sales to college students, American Future Systems operates by having either its “booking office,” located at its headquarters in Bryn Mawr or its sales representative who has responsibility for that geographic area in which the college is situated seek out a particular college student by telephone and asking her if she would like to host an American Prestige show on campus. 24. At the time of the initial telephone contact, a stu- dent hostess is informed that if she hosts the show, she will 57a be given a tote bag and that there is the possibility that one of the attendees of the show, including herself, will win a “Florida holiday.” 25. The value of the tote bag mentioned in the preceding paragraph is $6.00. 26. During the initial telephone conversation, the American Future Systems representative indicates to the student being solicited that the Florida holiday is a vaca- tion in Florida for four days and three nights and does not include meals and transportation. z.. No other terms and conditions relating to the Florida holiday are mentioned during the initial phone contact. 28. Before the scheduled show, a student agreeing to host such a demonstration receives a packet of informa- tion containing a number of invitations for guests and a description of what is involved at the show. 29. A sales demonstration put on by American Future Systems generally proceeds in two parts: A demonstration of the American Prestige Series products including a com- parison of those products with other merchandise and an explanation of why American Prestige products are superior, and a sales portion where interested students are given an opportunity to purchase oroducts on an install- ment plan basis. 30. Each student attending the show receives a jade necklace which has a value of $12-1/2. 31. At the times relevant to this proceeding, it was American Future Systems’ policy to attempt to have 10 to 15 persons in attendance at a sales demonstration. That ee or non- college students. 58a 32. American Future Systems’ policy prohibited the drawing of a winner of the Florida holiday or the awar- ding of the tote bag to a hostess if 10 eligible person did not attend the show although the latter aspect of that policy is often violated by individual sales representatives. 33. The price of a “package” of merchandise sold to a student by American Future Systems ranges from $450.00 to $600.00. 34. If 10 eligible persons do not attend a sales demonstration, American Future Systems’ representatives are under instructions to inquire of a student hostess whether they can go door to door accompanied by the hostess in a residence hall in order to secure the required number of persons for attendance at a show. 35. Sales representatives of American Future Systems generally do not reveal at sales demonstrations that the “Florida holiday” which will be given away may not be us- ed unless the winner is 21 years of age, that the certificate which will be issued expires at a particular time which is often well before a winner reaches the age of 21, that there is an extra charge for the lodging if the vacation is used between December 18 and April 2 of any year, and that a person using the vacation is required to attend a meeting of an organization known as the “VIP Vacation Club” upon arrival in Florida or her certificate will not be validated. 36. American Future Systems pays $2.00 for each | llorida heliday vacation certificate issued as a result of one of its drawings. 37. If the student decides to purchase American Prestige Series merchandise at the end of a sales demonstration, she is required to sign a sales contract at that time. 59a 38. American Future Systems does comply with legal provisions requiring it to permit a student signing a con- tract for the sale of merchandise in the residence hall to rescind the contract within three days of the date of its signing. 39. An American Future Systems’ contract contains a “code” at the bottom which consists of a number of letters. Those letters and the explanation given to them by American Future Systems’ representatives are as follows: Letters Explanation Deposit Turned In Deposit kept by sales representative General student Minority (Black) student Married Couple Student of Spanish descen: Student of Oriental descent Student of Mexican descent Regular 4-year college Junior College Nursing School Vocational School S) : = Court noted a number of factors relating to such in-persoi solicitations which are relevant to this case. First, it stated that commercial speech is not wholly undifferentiable from other forms of speech and indicated that commercial speech can be regulated in a manner not necessarily permissible in the field of non- commercial speech. Second, the Court stated that in- person solicitation of sales is “a business transaction in 70a which speech is an essential but subordinaie component” and indicated that it differed even from the type of adver- tising present in the Virginia Pharmacy and Bates cases because it had the potential for exerting pressure on the recipient of the information, it demanded an immediate response from him, and it countervailed to some extent the purpose of advertising which permits free, rational, and informed consumer decision-making. Solicitation, because of the pressure on the person being solicited and the requirement that he react either negatively or positively to the service or goods being offered, does not promote reflective thinking on the content of the communication or encourage comparison of different services and prices so that it enjoys less protection than commercial .dvertising. Consequently, the state’s interest in maintaining the pro- fessionalism of attorneys and in prohibiting the type of overreaching which was potentially present in in-person solicitation of clients by attorneys justified the state’s pro- hibition of such contacts. It is beyond dispute that American Future Systems has a right under the First Amendment to disseminate certain in- formation with respect to the product which it sells. That information probably includes the type of product, how it compares with other products, and the price for which it sells. It is the view of the Court that in this case, however, American Future Systems asserts that it has a First Amendment right which goes beyond the right to disseminate such information to interested consumers. In effect, American Future Systems argues that it has a con- Stitutional right to conduct sales demonstrations which re- quire the presence of an American Future Systems representative, ten to fifteen interested consumers, and an hour-long exposition on the virtues of American Future Systems products followed by a short period of time dur- ing which sales to interested students are consummated. Tila The Court is not convinced that American Future Systems has a constitutionally protected right to sell its merchan- dise to college students in the manner which it has selected as being the most conducive to such sales. The programs put on by American Future Systems representatives on college campuses most closely resemble the conduct in Ohralik vs. Ohio State Bar Association, 436 U.S. 447 (1978) which the Court characterized as a business transac- tion in which speech is an essential but subordinate com- ponent. The Court is not of the view that Penn State’s regulations prohibiting commercial solicitation in the residence halls o» %e University Park Campus can be fair- ly characterized a. 4 restriction upon the First Amendment rights of American Fuiure Systems. Essentially, Penn State has attempted to separate business transactions from the speech which accompanies them and has sought to regulate only the former. The evidence presented at trial shows that Penn State does not restrict the ability of com- mercial organization, including American Future Systems, to advertise in student newspapers or on student radio sta- tions or to provide consumer information to students either through use of the telephone or the United States mails. Penn State has not attempted to prevent whatever evils might be present in the solicitation of sales by American Future Systems representatives by keeping the student body in ignorance of the information American Future Systems attempts to communicate to them. Rather, its policies prohibit American Future Systems represen- tatives only from appearing on campus without an invita- tion in order to attempt to transact business or from ap- _ pearing on campus with an invitation in an attempt to transact business with more than one student. In the view of the Court that Penn State’s regulations do not place any burden upon American Future Systems’ ability to disseminate information about its products to Penn State 72a students although those regulations do preclude American Fuiure Systems from using its chosen method for such dissemination. So long as the information is reasonably available to students, a commercial vendor has no First Amendment right to disseminate it in the manner in which he chooses. Assuming, however, that Penn State’s residence hall regulations render it more difficult for students to obtain the type of information about commercial products which American Future Systems seeks to distribute, it does not follow that Penn State’s regulations must fall. Two justifications support the exclusion of American Future Systems representatives from Penn State in 1977, either of which is sufficient to overcome any possible infringement upon American Future Systems’ First Amendment rights. First, Penn State asserts that its residence hall policy is based upon a need for privacy of the students residing therein and the desire-on the part of the institution to maintain a study-like atmosphere within the residence halls. Penn State produced evidence at the trial that American Future Systems demonstrations, lasting as long as an hour and a half, can be disruptive of the normal routine of residence halls and can preclude students from using common a:eas of the dormitories for purposes such as studying for which they were originally intended. Addi- tionally, the Court recognizes that residence walls are in essence a student’s “home away from home” arid that the university may adopt such regulations as are reasonable to prohibit persons who are not university students or residents of dormitories from utilizing space therein. American Future Systems placed much emphasis on the fact that their representatives did not go on the Penn State campus or inio the residence halls unless they were invited there by students. However, that contention is weakened when placed in context. The evidence demonstrated that 73a American Future Systems solicits invitations from in- dividual students and that a representative will not go on campus merely to talk with one student even for the pur- pose of consummating a business transaction. Rather, once an invitation has been solicited, the American Future System representative induces the student hostess to invite a number of other students to attend an American Future Systems sales demonstration. Such a sales practice is in- consistent with the premise that American Future Systems speaks only to persons who have taken the initiative to in- vite them on campus. Penn State demonstrated at the trial that in 1977 American Future Systems engaged in certain deceptive or potential coercive practices. The Supreme Court has recognized that the type of in-person solicitation of sales engaged in by American Future Systems differs from con- ventional protected speech because of the pressure exerted on the recipient of the sales talk, the fact that he must res- pond immediately to a request made to purchase merchan- dise, and the fact that persons in attendance at shows of American Future Systems do not have adequate time to reflect on the information which they have received and to make an intelligent, rational, and informed choice. Cf. Ohralik vs. Ohio State Bar Association, 436 U.S. 447 (1978). Therefore, the fact that American Future Systems engages in in-person solicitation makes that type of con- duct peculiarly subject to regulation which attempts to avoid the dangers outlined above. Penn State’s prohibition of group solicitation but permission of one student to in- vite a commercial vendor on campus for the purpose of conducting a business transaction with that student bears a reasonable relationship to the goal of avoiding the pressure tactics of in-person sales demonstrations. The fact that federal law requires that a student who purchases merchandise in the manner by which American Future 74a Systems sells its products be given a unilateral right or rescission for three days after the sale does not preclude Penn State from attempting to regulate further the con- duct of in-person sales solicitations. Further, in 1977 American Future Systems engaged in what this Court views as deceptive practices relating both to its “Florida holiday” drawing and its credit practice. American Future Systems representatives did not disclose the manner in which American Future Systems extended credit to students and concealed at least some of the details relating to the Florida holiday from Penn State students. Therefore, even assuming that Penn State’s regulation prohibiting commercial solicitation in the residence halls is overbroad, it was properly applied to American Future Systems in September of 1977. Penn State’s interest in the privacy of its students and in preventing a company engag- ed in questionable commercial practices from soliciting on campus were sufficient to overcome any possible infringe- ment upon American Future Systems’ First Amendment rights occasioned by the prohibition of their sales demonstrations. If there is a common theme running through the Supreme Court’s recent decisions relating to commercial speech, it is that deceptive and fraudulent commercial speech is clearly subject to reasonable regula- tion. See Young vs. American Mini Theatres, Inc., 417 U.S. 50 (1976); Virginia State Board of Pharmacy vs. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976). American Future Systems has also asked the Court to enjoin Penn State from continuing to enforce its policy against commercial solicitation so as to preclude American Future Systems from holding sales demonstrations on the University Park campus. In support of this position, American Future Systems argues that it is willing to abide by any reasonable time, place and manner regulations im- 7Sa posed by Penn State in the future even though it may not have done so in the past. It is the view of the Court that an injunction should not be issued in this case for a number of reasons. First, as noted above, the Court is not convinc- ed th [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1119%3A1. Public record. Not legal advice.