Petition — Hustler Magazine, Inc. v. Eastman Kodak Co.

MAR 19 1983

No.

fa t AG

en

SUPREME COURT OF THE UNITED STATES

October Term, 1982

HUSTLER MAGAZINE, INC.,

a corporation, and

CHIC MAGAZINE, INC.,

a corporation,

Petitioners,

vs.

EASTMAN KODAK COMPANY,

a corporation,

Respondent.

WRIT OF CERTIORARI

To The United States Court Of Appeals

For The Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

RICHARD D. AGAY

COOPER, EPSTEIN & HUREWITZ

A Professional Corporation

9465 Wilshire Blvd., Suite 800

Beverly Hills, California 90212

(213) 278-1111

Attorneys for Petitioners

1. QUESTIONS PRESENTED FOR REVIEW.

1.1. Does censorship of speech in

the form of pictures “based

upon fear of criminal prosecution" under

state and federal statutes by one who has

received state and federal trademark and

patent grants constitute state action?

Included within this broader issue are the

following latent questions:

1.1.1. Does the standard for

measurement of signifi-

cant governmental involvement to constitute

State action vary with the wrong charged

such that the “state compulsion. test"

repeatedly applied by this Court in race

discrimination caseS can properly be

ignored where race discrimination is not

involved (which position some lower courts

have adopted based upon Justice Brennan's

concurring and dissenting opinion in

Adickes v. Kress & Co., 398 U.S. 144, 90

S.Ct. 1598 (1970)) or does this Court's

decision in Lugar v. Edmondson Oil Co.,

whe

Inc., i - , 102 S.Ct. 2744 (June

25,1982) command consistent application of

the state compulsion text?

1.1.2. Is application of the

"public function test" as

an alternative basis for finding state

action inapplicable by reason of Flagg

Bros., Inc. v. Brooks, 436 U.S. 149, 98

S.Ct. 1729 (1979) in all private commer-

cial transactions (as successfully urged

by Respondent in the lower courts, but

contrary to a long line of other cases) or

does Flagg prohibit such application to the

more limited aspect of private commercial

transactions involved in the “settlement

of disputes between debtors and creditors"?

1.1.3. In determining the pres-

ence of state action

under the "nexus test", is the grant of

State and federal trademark and patent

monopolies to be treated as the leasing of

public property (held sufficient under

Burton v. Wilmington Parking Authority,

wi in

365 U.S. 715, 81 S.Ct. 856 (1961)) or as

the ministerial acts of granting corporate

charters, licenses and permits (which have

been found to be insufficient)?

1.2. Is a magazine publisher-

owner of pictures entitled

to a determination of the constitutionality

of the application of state and federal

statutes which require confiscation of

pictures by a film processor, without due

process or compensation, where the pictures

have not yet been subjected to editorial

process from which it is determined if the

picture should be published, if so what

portion, if so in what context within the

individual article, and if so the overall

content of the magazine?

1.3. May obscenity statutes be

applied to require censorship

by private parties of materials in the

prepublication stage without the proce-

dural due process protections heretofore

prescribed by this Court?

-iii-

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW . . i

TABLE OF CONTENTS . .....-+2-. iv

TABLE OF AUTHORITIES ...... . vii

OPINIONS BELOW . . 7. e . o = . . °

JURISDICTION THIS COURT ...=. «© «

CONSTITUTION AND STATUTES .....

STATEMENT OF CASE ... ++ + «© « »

Ww WwW DN fF

JURISDICTION -- LOWER COURTS ... 10

REASONS FOR GRANTING WRIT ..... 10

ARGUMENT

7 * . . — o . . . +. . . al 13

8.1. Standard Of Review ..... 13

8.2. Application of Statutes ... 15

Compelling Respondent's

Confiscation Violates

Petitioner's Freedom of

Speech

8.2.1.

8.2.2.

Censorship Limitations . 17

- Prior Restraint

Pre-Publication ..... 2i

Material Cannot

Be Censored

TABLE OF CONTENTS (cont'd)

8.2.3. Available Alternative .. 24

Means of Publication

Will Not Save A

Prior Restraint

8.2.4. Must Consider Finished . 25

Whole Magazine

8.2.5. Respondent's Policy... 27

Does Not "Track"

8.2.6. Procedural Due Process . 28

8.3. State Action Exists On Any . 29

One of Three Bases

8.3.1. State Action Arises ... 29

From Compulsion of

Statutes

G.3-1.1. Gepseetive « «+ «s+ < =e

Motivation

Irrelevant

8.3.1.2. Compulsion Test Not . 33

Restricted To Race

Discrimination

8.3.1.3. Presumptive ..... 37

Validity of

Statutes

Irrelevant

8.3.1.4. Conclusion Re .... 39

Compulsion

8.3.2. State Action Arises ... 40

From Defendant's

Exercise of Censorship

Function

-yo>

TABLE OF CONTENTS (cont'd)

Page

8.3.3. State Action Arises ... 45

From Trademark and

Patent Grants

8.4. Defendant Did Not Prove ... 48

Absence of Justiciable

Controversy to Deprive

Petitioner's Trial For

Declaratory Relief

8.4.1. There is Justiciable .. 49

Case

8.5. Plaintiffs Did Not Waive .. 54

Claims

8.6. Motion Premature ...... 54

9. CONCLUSION - RELIEF REQUESTED ... 55

TABLE OF AUTHORITIES

CASES Page

Adams v. Southern California 7

First National Bank, 492 F.2d

324 (9th Cir. 1973)

Adickes v. Kress & Co., 398 11,14,15,16

U.S. 144, 90 S.Ct. 1598 30,31,32,36

(1970) 38,49

Baggett v. Bullitt, 377 U.S. 23

360, 64 S.Ct. 1313 (1964)

Baldwin v. Morgan, 287 F.2d 750 16

(5th Cir. 1961)

Bantam Books, Inc. v. Sullivan, 4,18,24

372 U.S. 58, 83 S.Ct. 631

(1963)

Blount v. Rizzi, 400 U.S. 410, 28

91 S.Ct. 423 (1971)

Blum v. Yaretsky, __ U.S. ’ 37

102 S.Ct. 2777 (June 25,

1982)

Burton v. Wilmington Parking 46

Authority, 365 U.S. 715,

81 S.Ct. 856 (1961)

Cantwell v. Connecticut, 310 18

U.S. 296, 60 S.Ct. 900 (1940)

Doe v. Charleston Area Medical 30,34,35

Center, Inc., 529 F.2d 638

(4th Cir. 1975)

Erznoznik v. City of Jacksonville, 3

422 U.S. 205,211, 95 S.Ct. 2268

2273 (1975)

-vii-

TABLE OF AUTHORITIES (cont'd)

CASES (cont'd) Page

Flagg Bros., Inc. v. Brooks, 30,36,43,44

436 U.S. 149, 98 S.Ct. 1729 45

(1978)

Freedman v. Maryland, 380 U.S. 28,29

51, 85 S.Ct. 734 (1965)

Fuentes v. Shevin, 407 U.S. 67, 40,44

92 S.Ct. 1983, (1972)

Gold v. United States, 378 F.2d 53

588 (9th Cir. 1967)

Goldblum v. National Broadcast- 20,22

ing Company, 584 F.2d 905

(9th Cir. 1979)

Golden v. Zqickler, 394 U.S. 103, 52

89 S.Ct. 956 (1969)

Granfield v. Catholic University of 52

America, 530 F.2d 1035 (D.C. Cir.

1976)

Griffith Rubber Mills v. 48

Hoffar, 313 F.2d 1 (9th Cir.

1963)

Hall v. Garson, 430 F.2d 430 40

(5th Cir. 1970)

Heiniger v. City of Phoenix, 13,14

625 F.2d 842, 843 (9th Cir.

1980)

Hospital Building Co. v. 55

Trustees of Rex Hospital, 425

U.S. 738, 96 S.Ct. 1848

(1976)

-viii-

TABLE OF AUTHORITIES (cont'd)

CASES (cont'd) Page

Illinois State Employees Union 55

Council 34, Etc. v. Lewis,

473 F.2d 561 (7th Cir. 1972)

In re Klor, 64 Cal. 2d 816 23,24

(1966)

Interstate Circuit, Inc. v. 28,29

City of Dallas, 390 U.S. 676,

88 S.Ct. 1298 (1968)

Jackson v. Metropolitan Edison 47

Co., 419 U.S. 345, 95 S.Ct.

449 (1974)

Jackson v. Statler Foundation, 8

496 F.2d 623 izd Cir. 1974)

Joseph Burstyn, Inc. v. Wilson, 4

343 U.S. 495, 72 S.Ct. 777

(1952)

Lugar v. Edmondson Oil Co., 7,11,29,30

Inc., U.S. _ , 102 S.Ct. 36,38,39

2744 (June 25, 1982) 44

Marsh v. Alabama, 326 U.S. 501, 40,42

66 S.Ct. 276 (1946)

Mendez v. Heller, 530 F.2d 457 (2d 52

Cir. 1976)

Miller v. California, 413 U.S. 27

15, 93 S.Ct. 2607 (1973)

Moore v. Charlotte-Mecklenburg 50

Board of Education, 402 U.S.

47, 91 S.Ct. 1292 (1971)

aise

TABLE OF AUTHORITIES (cont'd)

CASES (cont'd)

Near v. State of Minnesota, 283

U.S. 697, 51 S.Ct. 625 (1931)

New York Times Company v.

Sullivan, 376 U.S. 254, 84

S.Ct. 710 (1964)

New York Times Company v. U.S.,

403 U.S. 713, 9) S.Ct. 2140

(1971)

North Georgia Finishing, Inc.

v. Di-Chem, Inc., 419 U.S.

601, 95 S.Ct. 719 (1975)

Orqanization For a Better

Reetia v. Keefe, 402 U.S.

415, 91 S.Ct. 1575 (1971)

Penthouse International, Ltd.

v. McAuliffe, 610 F.2d 1353

(5th Cir. 1980)

Peterson v. City of Greenville,

S.C., 373 U.S. 245, 83 S.Ct.

1119 (1963)

Pittsburgh Press Co. v. Pitts-

burgh Com'n on Human Rel.,

413 U.S. 376, 93 S.Ct. 2553

(1973)

Poller v. Columbia Broadcasting

System, 368 U.S. 464, 82

S.Ct. 486 (1962)

Quinn v. Aetna Life & Cas. Co.,

616 F.2d 38 (2nd Cir. 1980)

18

11,30,33

38

22

55

20

TABLE OF AUTHORITIES (cont'd)

CASES (cont'd)

Robinson v. State of Florida,

378 U.S. 153, 84 S.Ct. 1693

(1964)

Roe v. Wade, 410 U.S. 113, 93

S.Ct. 705 (1973)

Rutolo v. Rutolo, 572, F.2d 336

(lst. Cir. 1978)

Sears, Roebuck & Co. v. Stiffel

Co., 376 U.S. 225, 84 S.Ct.

784 (1964)

Simkins v. Moses H. Cone

Memorial Hospital, 323 F.2d

959 (4th Cir. 1963)

Smith v. Allwright, 321 U.S.

649, 64 S.Ct. 757 (1944)

Sniadach v. Family Finance

Corp. of Bay View, 395 U.S.

460, 89 S.Ct. 1820 (1969)

Southeastern Promotions, Ltd.

v. Conrad 420 U.S. 546, 95

S.Ct. 1239 (1975)

Taylor v. St. Vincent's

Hospital, 523 F.2d 75 (9th

Cir. 1975)

Terry v. Adams, 345 U.S. 461,

73 S.Ct. 809 (1953)

Timberlane Lumber Co. v. Bank

of America, 549 F.2d 597 (9th

Cir. 1976)

-xi-

Page

11,30,33

38

4

51,52

48

7,8

40

40,44,45

18,20,21

25,28

47

40

55

TABLE OF AUTHORITIES (cont'd)

CASES (cont'd) Page

United States v. Johnson, 319 51

U.S. 302, 63 S.Ct. 1075

(1943)

United States v. One Book 26,27

Entitled Ulysses, 72 F.2d 705

(2nd Cir. 1934)

United States v. Price, 383 7

U.S. 787, 86 S.Ct. 1152

(1966)

United States v. Thirty Seven 28

(37), Photographs, 402 U.S.

363, 91 S.Ct. 1400 (1971)

United States v. Tupler, 564 6,7,17,26

F.2d 1294 (9th Cir. 1977)

Wolff v. Selective Service Local 52

Board No. 16, 372 F.2d 817 (2nd

Cir. 1967)

Zwickler v. Koota, 389 U.S. 241,254 52

88 S.Ct 391,399 (1967)

UNITED STATES CONSTITUTION

Art. I, §8 Cl. 8 48

First Amendment 3,4,9

Fourteenth Amendment 7,9

-xii-

TABLE OF AUTHORITIES (cont'd)

STATUTES Page

Federal

18 U.S.C. §1461 3,8,15,32,49

18 U.S.C. §1462 3,8,15,32,49

18 U.S.C. §1465 3,8,15,32,49

28 U.S.C. §1254 2

28 U.S.C. §1291 10

28 U.S.C. §1331 10

28 U.S.C. §1343(3) 10

28 U.S.C. §2201 3,49,50

28 U.S.C. §2403 51

42 U.S.C. §1983 3,7,8,9,14,30,35,44

State

California Penal 3,8,15,23,32,49

Code §311.2

RULES

Federal Rules of Civil Proce-

dure 56(£) 53,55

United States Supreme Court

Rule 21.1 (c) 1

Rule 21.1 (k) 2

-xiii-

Petitionersl/ respectfully pray

that a writ of certiorari issue to the

United States Court of Appeals for the

Ninth Circuit ("Ninth Circuit") to review

the final order of that court entered on

September 16, 1982 in case numbers 80-6077

and 80-5861 which affirmed the judgment

entered in the United States District

Court for the Central District of

California ("District Court") on Novem-

ber 14, 1980 in case number CV 80-561 IH

based upon an order entered September 29,

1980 granting Respondent's motion for

summary judgment.

2. OPINIONS BELOW. The opinions

below are unreported. Copies of

1/ The caption lists all parties (Rule

21.1(c)). L.F.P., Inc. is Petitioners'

parent company, and there are no

affiliates or subsidiaries other’ than

wholly owned subsidiaries of one of the

Petitioners except LFZ, Ltd., a subsidiary

of Hustler Magazine, Inc. Petitioners are

unaware of Respondent's parent, subsidiary

or affiliated companies.

opinions are included in Appendix A.2/

3. JURISDICTION THIS COURT. The

judgment sought to be reviewed is

the Order of the Ninth Circuit filed

September 16, 1982 affirming November 14,

1980 District Court, Judgment for

Respondent based on September 29, 1980

District Court Order granting Respondent's

motion for summary judgment. On

November 15, 1982, the Ninth Circuit

denied Petitioner's Petition For Rehearing

and the Request for Rehearing en banc

filed September 30, 1982. On January 24,

1983, this Court extended the time for

this Petition to March 19, 1983. This

Court has jurisdiction of a petition for

writ of certiorari under 28 U.S.C. §1254.

2/ With this Petition are two appendices

each being filed under separate cover

pursuant to Rule 21(k). All references

herein (1) to "App." are to Appendix A

(and the page numbers thereof are preceded

by the letter "A"), or (2) to "Ex." are to

Appendix B (Excerpts filed in Court of

Appeals).

4. CONSTITUTION AND STATUTES. This

case involves the following con-

stitutional provisions and statutes, the

pertinent text of which is set forth in

App. A-54-58: First Amendment to United

States Constitution, Fourteenth Amendment

to United States Constitution ("Amend-

ment(s)"), 18 U.S.C. §§1461, 1462 and 1465

("§§1461-5"), 28 U.S.C. §2201, 42 U.S.C.

§1983 ("§1983") and California Penal Code

§311.2 ("§311.2").

5. STATEMENT OF CASE. Petitioners

(Plaintiffs and Appellants below)

gave film to Respondent (Defendant and

Appellee below and sometimes called

"Kodak") for developing. Respondent

confiscated the developed pictures3/

3/ In this case the pictures are in the

form of transparencies. Pictures are

within the ambit of protection of the

First Amendment of the United States

Constitution ("First Amendment"). N. 7 in

Erznoznik _v. City of Jacksonville, 422

U.S. 205,211, 95 S.Ct. 2268,2273 (1975).

"[P]lays, motion pictures and photographs

are protected forms of expression, (cont'd)

-3-

(App. [see N.2, supra] 14:25) pursuant to

its policy adopted because of its fear of

prosecution under, and therefore under

color of, both federal and State laws.

(Trial Court's findings at App. 38:24,

40:12 and 40:23 and Respondent's

concession at Ex. [see N.2, supra]

103-107, [quoted in part at N.5 App. A-62]

and App. A-1lll and A-123 [quoted in §8.2

infra).) Petitioners are unable to obtain

quality processing from other sources.

(Ex. 279:14, 296:5, 301:19, 306:16,

310:22.)

Respondent's developing film for a

publisher is merely an early intermediate

3/ (cont'd) Joseph Burstyn Inc. v.

Wilson, 343 U.S. 495,502, 72 S.Ct. 777

(1952) ." Magazines are likewise pro-

tected, and are presumptively protected

material under the First Amendment.

Penthouse Intern., Ltd., v. McAuliffe, 610

F.2d 1353,1359 (5th Cir. 1980). “It is of

no significance that expressicn which is

protected by the First Amendment takes

place in a commercial setting. Bantam

Books, Inc. v. Sullivan, 372 U.S. 58,

S.Ct. 631 (1963)."

step in Petitioners' publication process

(Ex. 274:15-278:21) and Respondent is aware

of that fact (Ex. 124:21). Although

Respondent has the pictures4/ (and

Petitioners have not seen them), Respon-

dent's motion for summary judgment neither

attaches nor describes the withheld

pictures.2/

Petitioners' evidence (Ex. 276-

278) shows that none of the following is

4/ Petitioners submitted clear evidence

that while the pictures held by Respon-

dent may be under others’ names, Respon-

dent is withholding films belonging to

Petitioners. (Ex. 289 to 293, 310:8, 312

and 313.) The District Court found that

Respondent has retained and refused to

deliver the pictures (Ex. 365:25), and

Respondent at oral argument (Ex. 366:9)

and in its brief to the North Circuit

(App. A-110) accepted this finding.

5/ Petitioners do not believe that the

contents of such transparencies is

relevant in this litigation much less in

the summary judgment motion. Obviously no

one can say what the film never even

presented to Respondent (because of

Respondent's confiscation practice) would

have shown.

known: (1) how the confiscated transpar-

encies would have been altered before

publication, (2) which of the transpar-

encies would have been used at all,

(3) what the size of the pictures in the

Magazine would be, (4) the content of the

text of article in which the pictures

would appear, or (5) the overall content

of the magazine.§/

6/ Respondent by footnote to its trial

court brief (Ex. 73) without any sup-

porting foundation in any sworn statement

refers to an attachment which purportedly

contains copies of other publications by

the Petitioners which obviously do_ not

include the transparencies which

Respondent has’ withheld. Assuming’ the

attachments to Respondent's counsel's

brief had been proved to be Petitioners’

product, they still would not be

evidence. First, they do not demonstrate

whether these (or any other) particular

pictures in Respondent's hands would ever

be used for the above reasons. Secondly,

in United States _v. Tupler, 564 F.2d

1294,1297-1298 (9th Cir. 1977), the Court

stated that evidence “that both the sender

and the recipient of the shipment were

known dealers in sexually explicit

materials; that one of the suspects in the

case had previously been convicted of an

obscenity offense and was currently under

indictment for another; and that the clerk

in the consignee bookstore (cont'd)

=<

Petitioners filed their Complaint

in four counts, the first of which is for

anti-trust violations. The second?/ and

6/ (cont'd) described similarly labeled

films as ‘hard core’ do not constitute

evidence of the motion picture film under

consideration.” Nor may reference be made

to prior publications of Petitioners. A

restraint which “operates to suppress, on

the basis of previous publications" is

unconstitutional. Organization For A

Better Austin v. Keefe, 402 U.S. 415,418,

91 S.Ct. 1575,1577 (1971).

7/ The second count of the instant Com-

plaint is brought under §1983 which re-

quires that the challenged conduct be done

"under color of any statute, ordinance,

regulation, custom or usage, of any State

or Territory.” "The under color of law

requirement of §1983 has been treated as

the equivalent of the state action

requirement of the Fourteenth Amendment."

Adams v. Southern Calif. First Nat. Bank,

492 F.2d 324,329 (9th Cir. 1973). "In

United States v. Price, 383 U.S. 787, 794,

n. 7, 866 S.Ct. 1152, 1157 n. 7, (1966), we

explicitly stated that the requirements

were identical: ‘In cases under §1983,

"under color" of law has consistently been

treated as the same thing as the “state

acticn” required under the Fourteenth

Amendment.'" Lugar _v. Edmondson Oil Co.,

Inc., U.S. , 102 S.Ct. 2744, 2749

(June 25, 1982). For purposes of deter-

mining whether a private party is subject

to prohibitions of the Amendments to the

Constitution, “state action" includes both

federal action and action by one of the

several states (Simkins v. Moses (cont'd)

-Jeo

third counts seek damages and injunctive

relief under §1983 and the First and

Fourteenth Amendments, respectively, by

reason of Respondent's interference under

color of law with Petitioners’ exercise of

their rights of free speech. Count 4

further seek a declaration that §§311.2

and 1461-5 cannot be applied so as to

subject a fiim processor to criminal

prosecution for returning pictures to the

owner for possible subsequent use in a

Magazine, and thereby indirectly censor

7/ (cont'd) H. Cone Memorial Hospital,

323 F.2d 959,967 (4th Cir. 1963)), but

might technically better be described

generically as "governmental action" (N.5,

Jackson v. Statler Foundation, 496 F.2d

7627 (2nd Cir. 1974)). Respondent con-

cedes that in light of the third count,

seeking recovery based upon the First and

Fourteenth Amendments, the determination of

governmental action (state action) must

consider not only the involvement of the

State of California, but also the United

States. (Ex. 84:17.) While "governmental”

would be better descriptive, since the

words “state action” have been repeatedly

used to include both federal and State

actions, we shall refer to “governmental

action" or “state action" interchangeably

to include both federal and State action.

the publisher through prior restraint.

Respondent filed its answer and a

motion for summary judgment. On Septem-

ber 22, 1980, the District Court announced

its decision to grant the motion as to the

second, third and fourth counts and to

grant the motion (to dismiss) the first

count, with leave to amend within ten

days .8/

An action for mere possession would

be fruitless in that by the time transpar-

encies are returned they would be of

little, if any, value. (Ex. 273:7-284:4.)

Petitioners are in a position where they

have no relief available for Respondent's

wrongful censorship and confiscation unless

they can receive relief under §1983 or the

First or Fourteenth Amendments or can

obtain a declaration that application of

the statutes to require such censorship

8/ No amendment was filed and Petitioners

seek no review of the portion of Judg-

ment based on dismissal of Count l.

-9-

and confiscation is unconstitutional.

6. JURISDICTION -- LOWER COURTS.

The district court had subject

matter jurisdiction of Count 2 thereof

under 28 U.S.C. §1343(3), and of Counts 3

and 4 under 28 U.S.C. §1331. The Ninth

Circuit had jurisdiction under 28 U.S.C.

§1291.

7. REASONS FOR GRANTING WRIT.

7.1. The Ninth Circuit's decision

that censorship based upon

fear of criminal prosecution under state

and federal statutes does not constitute

state action is in direct conflict with

the decision of the Fourth Circuit.

(§8.3.1.2., beiow.)

7.2. The Ninth Circuit by affirm-

ing the District Court's

decision "for the reasons announced by

the district court” (App. A-i) ruled

that decisions in race discrimination

cases?/ applying the "state compulsion

test"12/ = were inapplicable to other

cases, thereby establishing a hierarchy of

constitutional rights. Either that

decision is in conflict with the applic-

able decisions of this Court or if the

decisions of this Court have not settled

the matter, then it is an _ important

question of federal law which should be

settled by this Court.

7.3. The important question of

federal law as to whether the

"public function test" is to be inapplic-

able in all private commercial transac-

tions or only in those involving the

"settlement of disputes between debtors

and creditors" has not been, but should

9/ Adickes v. Kress & Co., 398 U.S. 144,

80 S.Ct. 1598 (1970), Robinson v. State

of Florida, 378 U.S. 153, 84 S.Ct. 1693

(1964); and Peterson v. City of Greenville,

§.C., 373 U.S. 245, 83 S.Ct. 119 (1963).

10/ So denominated in Lugar, supra, U.S.

at _, 102 S.Ct. at 2755 (June 25,

1982) citing Adickes, supra.

elie

be settled by this Court.

7.4. Whether the grant of trade-

mark and patent monopolies

which serve to enable a defendant's wrong

are sufficient to constitute state action

is an important question which has neither

been decided by this Court nor by any

court in a published decision (App. A-122),

and should be settled by this Court.

7.5. The rulings of the _ lower

courts here approve the ap-

plication of obscenity statutes to require

censorship by private parties of materials

in a pre-editorial stage without consider-

ation of (1) how the materials will

ultimately appear in published version,

(2) the entire article of which’ the

materials would become a part, or (3) the

entire magazine issue of which the article

would become a part, and in so doing

either conflict with the applicable

decisions of this Court, or decide an

important question of federal law which

-12-

has not been, but should be, settled by

this Court.

7.6. The rulings of the lower

courts in this case approve

the application of obscenity statutes to

require censorship by private parties of

materials in the pre-publication’ stage

without procedural due process’ protec-

tions, and as such either are in conflict

with the applicable decisions of this

Court or decide an important question of

federal law which has not been, but should

be, settled by this Court.

8. ARGUMENT.

8.1. Standard Of Review. The

Standard of review of the

granting of summary judgment is set out in

Heiniger v. City of Phoenix, 625 F.2d

842,843 (9th Cir. 1980) as follows:

“STANDARD OF REVIEW

"A reviewing court will affirm a

grant of summary judgment only if it

appears from the record, after

viewing all evidence and factual

interferences in the light most

«}3-

favorable to the appellant, that

there are no genuine issues of

material fact and that the appellee

is entitled to prevail as a matter

of law."

In an action under 61983, a

defendant moving for summary judgment has

the burden of foreclosing all possibility

that the plaintiff could prevail, and it

is the burden of the moving party to

"establish the absence of a genuine issue”

and not upon the opposing party to raise

same and "even if no opposing evidentiary

Matter is presented." Adickes, supra, 398

U.S. at 157,159,160, 90 S.Ct. at 1608,1609.

The foregoing standard of review

is consistent with the elementary rules

applicable to motion for summary judgments

which the lower courts did not follow: the

burden is upon the moving party to show

absence of genuine issue, the inferences

must be drawn in favor of opposing party,

the evidence and legal theories must be

viewed most favorably to opposing party

and the court may not weigh conflicting

~14-

affidavits or inferences.11/

8.2. Application of Statutes Com-

pelling Respondent's Confis-

cation Violates Petitioner's Freedom of

Speech. Respondent has conceded that

"Kodak adopted its policy [of

confiscation] only to protect its

own interest, solely because Kodak

fears that returning the sexually

explicit pictures it withholds might

Subject Kodak and/or its employees

to the risk of being criminally

prosecuted for violating constitu-

tionally valid state and federal

obscenity statutes." App. A-123.

"Kodak withholds... films and

pictures... to protect Kodak and its

employees from criminal charges and

prosecution based on the very act of

mailing or otherwise delivering the

film and pictures to Kodak's custo-

mers.5/" App. A-lll. (Respondent's

N.5 identifies the statutes as

§§1461-5 and §311.2.)

The District Court stated that the

State and federal statutes of which "Kodak

1l/ "As the moving party, respondent had

the burden of showing the absence of a

genuine issue as to any material fact, and

for these purposes the material it lodged

must be viewed in the light most favorable

to the opposing party." Adickes, supra,

398 U.S. at 157, 90 S.Ct. at 1608.

~-15<-

is concerned... track the decisions of the

Supreme Court [and] are presumptively and

probably valid." (App. A-40:12.) While

the statutes may "track" and be “presump-

tively valid," this the apnlication does

not track and is not presumptively or

otherwise valid. No case has yet sug-

gested that the state (may absent a clear

and present danger) interfere with free

speech before publication, or ever, absent

procedural due process which Petitioners

have not received, and the authorities are

Clear that the state may not compel another

to do what it could not do directly itself.

Baldwin v. Morgan, 287 F.2d 750,756, (5th

Cir. 1961) relied upon in Adickes, supra,

398 U.S. at 170-171, 90 S.Ct. at 1615.

Respondent's assertedly compelled appli-

cation of the statutes fails to “track”,

or comply with, the authorities in five

separate respects: (1) prior restraint at

a pre-publication editorial stage is

unconstitutional, (2) pictures in pre-

=}6-

publication form are not legally capable

of being’ tested for obscenity, (3)

Petitioners’ magazine must be judged as a

whole and not merely pictures therefrom,

(4) the Respondent tests applied do not

comport with the constitutional require-

ments and (5) Petitioners' have not been

afforded the procedural due process

required for censorship.

8.2.1. Censorship Limitations -

Prior Restraint,

"We must start from the recognition

that the films were presumptively

protected by the First Amendment.

Roaden v. Kentucky, 413 U.S. 496, 93

S.Ct. 2796 (1973). Since seizure of

First Amendment-protected materials

constitutes a form of prior re-

straint, the materials are entitled

to special treatment...” United

States v. Tupler, 564 F.2d 1294,1297

(9th Cir. 1977).

Respondent's policy of confiscation

directly affects and threatens Petitioners’

freedom of speech and press by precluding

its expression. This constitutes a prior

restraint of speech, for which the Supreme

Court has acknowledged a deep distaste and

o] Jo

which “comes to this Court bearing a heavy

presumption against its constitutional

validity." Bantam Books, Inc. Vv.

Sullivan, 372 U.S. 58,70, 83 S.Ct. 631,639

(1963)28/,

Application of the statutes to

compel Respondent's confiscation subjects

Petitioners’ freedom of speech to "apprais-

al of facts, the exercise of judgment, and

the formation of an opinion," factors

which characterize censorship,17/

16/ Later quoted in New York Times Company

ve, 8.8... $603 UeBe —Pasctate Gb Bebb

2140,2141 (1971). See also Southeastern

Promotions Ltd. v. Conrad, 420 U.S.

’ -554 S.Ct. 1239,1244 (1975) and

Cantwell v. Connecticut, 310 U.S. 296, 60

S.Ct. 900 (1940).

17/ See Southeastern, N. 16 supra, 420

U.S. at 558-9, 95 &.Ct. at 46-7, in

which the Court additionally stated: "It

is always difficult to know in advance

what an individual will say, and the line

between legitimate and illegitimate speech

is often so finely drawn that the risks of

freewheeling censorship are formidable.”

Here the evidence shows that not only is

it "difficult to know in advance what”

Petitioners magazines will say or depict,

it's impossible.

-18-

In Near v. State of Minnesota, 283

U.S. 697,721, 51 S.Ct. 625,633 (1931) the

Supreme Court struck down a statute

"authorizing suppression" of materials.

Here application of the statutes according

to Respondent requires it to suppress the

transparencies. The Court there _ stated

that it was irrelevant whether the

restraint was directly by the legislature

or only indirectly. In Near the asserted

justification for the prior restraint was

the injury suffered from libelous

publications. In this case the alleged

injury is the publication of obscenity.

Substituting obscenity for libel, the rule

to be drawn from Near is (bracketed

portions representing such substitutions):

"The recognition of authority to

impose previous restraint upon

publication in order to protect the

community against the circulation of

[obscene matter] necessarily would

carry with it the admission of the

authority of the censor against

which the constitutional barrier was

erected. The preliminary freedom,

by virtue of the very reason for its

existence, does not depend, as this

~j9~

court has said, on proof of

[nonobscenity]. [citation.]

"Equally unavailing is the insist-

ence that the statute is designed to

prevent the circulation of [obscen-

ity] which [is undesireable]. [T]he

theory of the constitutional guaran-

tee is that even a more serious

public evil would be caused by

authority to prevent publication.”

The rule of Near applies in the

case of disputes between private parties

as it does in disputes between’ the

government and a private party18/, and

freedom of speech and press applies to

commercial as well as non-commercial

speech .19/

In Southeastern, N. 16 supra, this

Court (420 U.S. at 552, 95 S.Ct. at 1243)

declared the defendant's conduct was

18/ Organization For A Better Austin vy.

Keefe, 402 U.S. 415,418, 91 S.Ct. 1575,

1577 (1971) and Goldblum v. National

Broadcasting Corp., 584 F.2n ’

Cir. 1979).

19/ New York Times Company v. Sullivan,

376 U.S. 254,256, 84 S.Ct. 710,713

(1964) and Quinn v. Aetna Life & Cas. Co.,

616 F.2d 38 (2nd Cir. 1980).

-20-

unconstitutional regardless of whether the

play was obscene. Once a prior restraint

was found, the nature of the speech became

insignificant.

8.2.2. Pre-Publication Material

Cannot Be Censored. Pe-

titioners and Respondent agree that the

film sent to Respondent by or for Peti-

tioners is merely an early intermediate

step in the process of Petitioners’

publishing their magazines. (§5 above.)

Respondent's threatened and actual confis-

cation of film directly intereferes with

the Petitioners' editorial process and

freedom of press by denying Petitioners

films which they might use, and therefore,

requires their use of other transparencies

of inferior quality. Application of the

Statutes as asserted by Respondent requires

it to enter the composing room of Petition-

ers to give directives as to the content

of expression by Petitioners and to censor

Petitioners' speech. The law with respect

-2l-

to such activity is well- stated in

Goldblum, N. 18, supra, 584 F.2d at 907:

"It is a fundamental principle of

the first amendment that the press

may not be required to justify or

defend what it prints or says until

after the expression has taken place.

The Government has been prohibited

from interfering with the editorial

process by entering the composing

room to give directives as to the

content of expression. The district

court proceedings here intervened in

the editorial process by ordering an

official of the broadcasting company

to produce a film just before its

scheduled broadcast so that it could

be examined for inaccuracies. A pro-

cedure thus aimed toward prepublica-

tion censorship is an inherent threat

to expression, one that chiils

speech." (Emphasis added and cita-

tions omitted.)

Similarly in Pittsburgh Press Co.

v. Pittsburgh Com'n on Human Rel., 413

U.S. 376,390, 93 S.Ct. 2553,2561 (1973)

this Court stated:

"The special vice of a prior

restraint is that communication wili

be suppressed, either directly or by

inducing excessive caution in the

Speaker, before an adequate determi-

nation that it is unprotected by the

First Amendment.”

Because of the assertedly compelled

application of the statutes, Respondent

-22-

exercises "excessive caution” resulting in

Petitioners loss of their freedom of

speech. In Baggett v. Bullitt, 377 U.S.

360,372,84 S.Ct. 1316,1323 (1964) this

Court struck down a statute creating a

prior restraint because it forced

"[t]hose... sensitive to the perils posed

by [the statute to] avoid the risk... by

restricting their conduct to that which is

unquestionable safe. Free speech may not

be so inhibited.”

In reversing a §311.2 conviction

the court in In Re Klor, 64 Cal.2d

816,820,821 (1966) stated:

"Without the requirement that the

defendant be shown to have prepared

the material with intent to dis-

tribute it in its obscene form, the

statute would apply to matter

produced solely for the personal

enjoyment of the creator or as a

means for the improvement of his

artistic technique. Such a statute

would approach an interdiction of

individual expression in violation

of the First and Fourteenth Amend-

ments. (See Griswold v. Connecticut

(1965) 381 U.S. 479, 482 [85 S.Ct.

1678]; American Communications Assn.

v. Douds (1950) 339 U.S. 382,412 [70

S.Ct. 674].)

-23-

x *«

"Nor does such conduct occur if the

creator intends to purge the mate-

rial of any objectionable element

before distributing or exhibiting it.

To hold otherwise would pose grave

technical difficulties for the uncon-

ventional artist and would, because

of the risk of criminal sanctions,

tend to suppress experimental and

tentative productions that might

become, in finished form, constitu-

tionally protected communication.

eee {T]he Fourteenth Amendment

requires that regulation by the

States of obscenity conform to proce-

dures that will ensure against the

curtailment of constitutionally

protected expression, which is often

separated from obscenity only by a

Gim and uncertain line.' (Bantam

Books, Inc. v. Sullivan (1963) 372

U.S. 58,66 [83 S.Ct. 631].)"

8.2.3. Available Alternative

Means of Publication Will

Not Save A Prior Restraint. The evidence

shows a conflict as to whether alternatives

are available to Petitioners. However,

even were alternatives proved as a matter

of law, it would not establish the absence

of genuine issue of state action.

"Whether petitioner might have used

some other, privately owned, theater

in the city for the production is of

-24-

no consequence. There is reason to

doubt on this record whether any

other facility would have served as

well as these, since none apparently

had the seating capacity, acoustical

features, stage equipment, and

electrical service that the show

required. Even if a privately owned

forum had been available, that fact

alone would not justify an otherwise

impermissible prior restraint.

'[O]ne is not to have the exercise

of his liberty of expression in

appropriate places abridged on the

plea that it may be exercised in

some other place.' Schneider v.

State 308 U.S., at 163, 60 S.Ct., at

151." Southeastern, supra, 420 U.S.

at 556, 95 S.Ct. at 1245.

8.2.4. Must Consider Finished

Whole Magazine. Here Re-

spondent at best is judging pictures which

May Or may not be included in a magazine

and is not considering the entire magazine,

because of course it can't. Such applica-

tion of a statute is unconstitutional.

"[A]ppellant would view each separate

article and pictorial presentation,

to determine whether each ‘work' in

a ‘volume' is obscene under the

Miller test. We conclude that deci-

Sions of both the Supreme Court and

this court require us to treat each

Magazine as a separate work that is

to be taken as a whole.” Penthouse

. McAuliffe, 610 F.2d

Intern., Ltd.

1353,1366-1367 (5th Cir. 1980).

~25<

If it is improper to view only

entire articles, how much more so to view

merely pictures from such articles.

In United States v. Tupler, N. 6,

supra, the court stated:

"First Amendment standards require

that any determination of obscenity

be made considering the material as

a whole...

"A single photographic print or ‘out

take’ from a roll of motion picture

film... could never establish prob-

able cause to believe that the film

"taken as a whole, lacks’ serious

literary, artistic, political, or

scientific value.'" 564 F.2d at

1297. (Emphasis added.)

If a single “out take" cannot

establish the obscenity of a _ motion

picture, then surely a_ single picture

which may never be used in a magazine

cannot establish that the magazine "taken

as a whole, lacks’ serious’. literary,

artistic, political, or scientific value.”

These cases follow the statements

of Judge Hand in U.S. v. One Book Entitled

Ulysses, 72 F.2d 705,707 (2nd Cir. 1934)

holding that the publication must be "taken

-26-

as a whole”.

8.2.5. Respondent's Policy Does

Not "Track". The stan-

dard for obscenity established in Miller

v. California, 413 U.S. 15,25, 93 S.Ct.

2607,2615 (1973) is a three-pronged test

including:

"(a) whether ‘the average person,

applying contemporary community

standards’ would find that the work,

taken as a _ whole, appeals to the

prurient interest; (b) whether’ the

work depicts or describes, in a

patently offensive way, sexual

conduct specifically defined by the

applicable state law; and (c)

whether the work, taken as a whole,

lacks serious literary, artistic,

political, or scientific value.”

413 U.S. at 25, 93 S.Ct. at 2615.

(Emphasis added, citations omitted.)

As discussed under §§8.2.2. and

8.2.4. above, the transparencies are (if

used at all) substantially altered prior

to appearance in Petitioners' magazines.

Textual material is also added. Respon-

dent's assertedly compelled application of

the statutes (Ex. 106-7) does not purport

to consider the whole magazine, and thereby

-27-

fails to comply with prongs (a) and (c) of

this conjunctive test. Nor does Respon-

dent's policy require depiction in a

“patently offensive way” so as to meet the

second prong.

8.2.6. Procedural Due Process.

This Court has imposed a

substantial set of due process requirements

upon censors ,20/ Respondent has

complied

with none of them and Petitioners have been

afforded none of the foregoing rights.

20/ See Freedman v. Maryland, 380 U.S. 5l,

58-59, 85 S.Ct. 734,739 (1965); United

States v. Thirty Seven (37) Photographs,

402 U.S. 363, 91 S.Ct. 1400 (1971); Blount

v. Rizzi, 400 U.S. 410, 91 S.Ct. 423

(1971); Southeastern Promotions, supra,

Interstate Circuit, Inc. v. City of

Dallas, 390 U.S. 676,684-689, 88 S.Ct.

1298, 1303-1306 (1968). The basic due

process requirements can be summarized as

follows: (1) the standard for determining

whether a work is obscene must comply with

constitutional standards of obscenity and

may not be vague, overly broad or

imprecise; (2) the burden of proving that

the work is unprotected expression must

rest on the censor; (3) the censor, within

a specified brief period, must either

issue a license or go to court to restrain

the use of the allegedly obscene material;

(4) any restraint imposed in ad- (cont'd)

-28-

"There must be some judicial determi-

nation of obscenity before a seizure

or ‘constructive seizure’ may occur.”

Penthouse, supra, 610 F.2d at 1359.

8.3. State Action Exists On Any

One of Three Basis. Respon-

dent did not prove as a matter of law the

absence of state action. Rather Petition-

ers demonstrated sufficient evidence to

permit trial of the issue of state action

on three separate basis: the "state compul-

sion test," the "public function test" and

the "nexus test." (Lugar, supra, U.S.

at __, 102 S.Ct. at 2744,2755.)

8.3.1. State Action Arises From

Compulsion of Statutes.

We agree with Respondent that a showing of

"significant governmental action and

20/ (cont'd) vance of a final judicial de-

termination on the merits must similarly be

limited to the preservation of the status

rey for the shortest fixed period compat-

ble with sound judicial resolution; (5)

the censorship procedure must also assure

a prompt final judicial decision to mini-

mize the deterent effect of an interim and

possibly an erroneous denial of a license.

Freedman, and Interstate Circuit, supra.

-29-

involvement” is required. (Ex. 82:9.) The

evidence, however, demonstrates that not

only was the government involved, it was

the catalyst for Respondent's actions by

compelling the same. (§5 above.) State

action exists when a party is acting under

compulsion of law. In Flagg Bros., Inc.

v. Brooks, 436 U.S. 149,164, 98 S.Ct.

1729,1737 (1978) this Court stated:

"Our cases state ‘that a state is re-

sponsible for the... act of a private

party when the state, by its law, has

compelled the act.’ Adickes, 398

U.S. at 170, 90 S.Ct. at I615."

This rule has been recognized by

this Court in Lugar, supra, and adopted in

Adickes, Robinson and Peterson, N.9, Supra,

and in Doe vy. Charleston Area Medical

Center, Inc., 529 F.2d 638 (4th Cir. 1975).

In Adickes, the plaintiff sued to

recover damages under §1983 and this Court

in reversing summary judgment for the

defendant, stated (upper case being Court's

emphasis) :

-30-

"Although this Court has not explic-

itly decided the Fourteenth Amendment

state action issue,... underlying

the Court's decisions in the sit-in

cases is the notion that the State

is responsible for the discriminatory

act of a private party when the

State, by its law, has compelled the

act. As the Court said in Peterson

v. City of Greenville, 373 U.S. 244

(1963): ‘When the state has com-

manded a particular result, it has

Saved to itself the power to deter-

mine that result and thereby ‘to a

significant extent’ has ‘become

involved' in it'. Moreover, there

is much support in lower’ court

Opinions for the conclusion’ that

discriminatory acts by private

parties done under the compulsion of

State law offend the Fourteenth

Amendment. In Baldwin v. Morgan,

Supra, the Fifth Circuit held that

"It]he very act of posting and main-

taining separate {waiting room]

facilities when done by the [rail-

road] Terminal as commanded by these

state orders is action by the state.'

The Court then went on to say: ‘AS

we have pointed out above the State

May not use race or color as the

basis for distinction. IT MAY NOT

DO SO BY DIRECT ACTION OR THROUGH

THE MEDIUM OF OTHERS WHO ARE UNDER

STATE COMPULSION TO DO SO.'...

"For state action purposes it makes

no difference of course, whether the

racially discriminatory act by the

private party is compelled by a

Statutory provision or by a custom

having the force of law -- in either

case it is the State that has

-3l-

commanded the result by its law."

398 U.S. at 170-171, 90 S.Ct. at

1615. (Emphasis added.)

Respondent here claims that it is

required to confiscate Petitioners’

pictures to avoid criminal prosecution

under §311.2 and §§1461-5. What could be

a clearer case of compulsion of law!

How did the lower courts” and

Respondent conclude that state action was

not present? The lower courts concluded

that the compulsion test did not apply

because (1) the statutes were presump-

tively valid and (2) the compulsion test

applied only in race discrimination cases,

while Respondent further asserts’ that

because its decision to confiscate pictures

was not formulated at the request of law

enforcement authorities its act is without

the compulsion test. None of these asser-

tions support their conclusion.

8.3.1.1. Subjective Motivation

Irrelevant. Once the

compulsion of statute exists, the subjec-

~-32-

tive motivation for Respondent's act be-

comes irrelevant. In discussing Peterson,

Supra, the court in Robinson, supra,

stated:

"([A] Greenville ordinance which made

it unlawful for restaurants to serve

meals to white persons and colored

persons in the same room or at the

Same table or counter. In Peterson

the city argued that the manager's

refusal to serve Negroes was based

on his own personal preference, which

did not amount to ‘state action' for-

bidden by the Fourteenth Amendment.

But we held that the case must be

decided on the basis of what the

Ordinance required people to do, not

on the basis of what the manager

wanted to do, We said: ‘when a

state agency passes a law compelling

persons to discriminate against

other persons because of race, and

the State's criminal processes are

employed in a way which enforces the

discrimination mandated by that law,

Such a palpable violation of the

Fourteenth Amendment cannot be saved

by attempting to separate the mental

urges of the discriminators'". 378

U.S. at 155-156,84 S.Ct. at 1695.

(Emphasis added.)

8.3.1.2. Compulsion Test Not

Restricted To Race

Discrimination. At App. A-38-39, the Dis-

trict Court stated that:

"{A] refusal to provide service and

-33-

to deal based on fear of prosecution

under state law does not constitute

state action... [T]he case here is

not a race discrimination case, state

action requirements are different in

race discrimination cases than they

are in other cases.”

Respondent has acknowledged that

the compulsion doctrine has been adopted by

this Court as a basis for finding state

action in cases involving racial

discrimination. App. A-123.

Neither the lower courts’ nor

Respondent has suggested any reason why an

activity done under fear of criminal

prosecution should constitute state action

if the activity is racial discrimination

but not constitute state action if the

activity violates free speech.

The test has been specifically

applied by the Fourth Circuit in Doe v.

Charleston, supra, in a case not involving

race discrimination. The plaintiff there

sought declaratory and injunctive relief

against a hospital for its refusing to

allow the plaintiff's physician to perform

-34-

an abortion at the defendant's private

hospital. The refusal was based upon a

fear of criminal prosecution under a state

law prohibiting abortion unless necessary

to save the life of another. In finding

"state action” for purposes of §1983 the

Court stated:

"It seems clear that the anti-

abortion hospital policy rests

firmly upon what was thought to be

the compulsion of state law. Thus

the hospital acted ‘under color of

law'". 529 F.2d at 643-644.

The lower courts here (App.

A-50:1-5) and Respondent acknowledge the

inconsistency of their position with Doe,

but conclude, without any logic or basis,

that the Fourth Circuit is wrong .21/

This clearly acknowledges a conflict in

the Circuits. Additionally the conclusion

flies in the face of statements by this

21/ Respondent's Brief to the Ninth Circuit

at App. A-126 argued that "Doe is sim-

ply wrong” and during oral argument before

the Ninth Circuit Respondent's counsel

explicitly conceded that the Doe case was

indistinguishable from this case.

-35-

Court in cases not involving race discrim-

ination. In Flagg, §8.3.1, Supra, this

Court recited the test in a case not invol-

ving race discrimination (but found that

the wrong alleged was not compelled). In

Lugar, supra this Court in a case not in-

volving race discrimination recited the

test.

Admittedly other lower courts (see

App. A-124) have by dicta asserted that

Gifferent standards for state action

applied in race discrimination cases,

based upon the statement to that effect by

Justice Brennan in his concurring and

dissenting opinion in Adickes, supra. In

N. 14 of Lugar, Supra, U.S. at , 102

§.Ct. at 2751 this Court stated:

"Justice Brennan's position {in

Adickes] rested, at least in part,

on a much less strict standard of

what would constitute state action

in the area of racial discrimination

than that adopted by the majority.

In any case, the position he articu-

lated there has never been adopted

by the Court.”

The Ninth Circuit has ignored this

-36-

expression, and the matter should be

settled by this Court, and uniformity

between the Circuits established.

Similarly in Blum vy. Yaretsky,

U.S. = 102 S.Ct. 2777,2786 (June 25,

1982), this Court in another case not

involving race discrimination noted that

if the act complained of had _ been

commanded by the state “we would have a

different question before us.”

8.3.1.3. Presumptive Validity

of Statutes Irrele-

vant. The reliance of the lower courts

here upon the presumptive validity of the

statutes is misplaced. First, as noted in

§8.2 above this application of the statutes

is not presumptively valid. But, even were

it presumptively valid, the validity has

nothing to do with the presence or absence

of state action.

Respondent (App. A-129) and_ the

District Court (App. A-49:9) assert that a

holding that state action arises by reason

-37-

of Respondent's acting to avoid criminal

prosecution would place it in a dilemma.

Neither Respondent nor the lower courts

suggested why that dilemma is any greater

for Respondent than it was for those who

by reason of state law requiring same were

following discriminatory practices in

Adickes, Robinson, or Peterson, Supra.

The contention that presumptive

validity of the statutes and the asserted

dilemma were responded to in Lugar, supra.

In holding that state action did exist the

court responded to similar concerns ex-

pressed in the dissenting opinion of

Justice Powell and stated as follows:

"We thus find incomprehensible

Justice Powell's statement that we

cite no cases in which a private

decision to invoke a presumptively

valid state legal process has been

held to be state action. Post at a

2761... [A] private party's invoca-

tion of a seemingly valid prejudgment

remedy statute, coupled with the aid

of a state official, satisfies the

state action requirement of the Four-

teenth Amendment and warrants relief

against the private party." N.16,

_.. «-iU.S. at , 102 S.Ct. at 2752.

(Emphasis added.)

-38-

"Justice Powell is concerned that

private individuals who innocently

make use of seemingly valid state

laws would be seageaatels if the law

is Subsequently held to be unconsti-

tutional, for the consequences of

their actions. In our view, however,

this problem should be dealt with

not by changing the character of the

cause of action but by establishing

an affirmative defense. A_ similar

concern is at least partially respon-

sible for the availability of a good

faith, defense, or qualified immun-

ity, to state officials. We need

not reach the question of the avail-

ability of such a defense to private

individuals at this juncture. What

we said in Adickes, 398 U.S. at 174,

N. 44, 90 S.Ct. at 1617, when con-

fronted with this question, is just

as applicable today:

""We intimate no views concerning the

relief that might be appropriate if

a violation is shown..." N. 23, __

U.S. at __—, 102 S.Ct. at 2757. (Em-

phasis added.)

8.3.1.4. Conclusion Re Compul-

sion. The inescapable

conclusion must be that Respondent's acts

were compelled by the state, that the

compulsion test does (or should now once

and for all be declared to) apply to First

Amendment cases, that there is no basis

for limiting the compulsion test to race

-39-

discrimination cases, and that such

compulsion here constitutes state action,

or at a minimum genuine issues of fact

were raised by Petitioners below which

preclude summary judgment.

8.3.2. State Action Arises From

Defendant's Exercise of

Censorship Function. One of the recognized

bases for finding state action is that the

act is one which has “traditionally been

the function of the State."22/ Here

Respondent acts as a censor in deciding

which pictures it will return to the

owners. (See nine separate affidavits

22/ Hall _v. Garson, 430 F.2d 430,439 (5th

Cir. 1970) [seizure of property to

Satisfy lien]; Marsh v. Alabama, 326 U.S.

501, 66 S.Ct. 276 (1946) [functions of

town]; Terry v. Adams, 345 U.S. 461, 73

S.Ct. 809 (1953) and Smith v. Allwright,

321 U.S. 649, 64 S.Ct. 757 (1944) [primary

elections]; North Georgia Finishing, Inc.

419 U.S. 601, 95 S.Ct.

v. Di-Chem, Inc.,

719 (1975); Fuentes v. Shevin, 407 U.S.

67, 92 S.Ct. 1983 (1972) and Sniadach v.

Family Finance Corp. of Bay View, 395 U.S.

460, 55 §.Ct. 1836 (1969) [enforcement of

creditor remedies].

-40-

filed by Respondent commencing at Ex.

147.) 23/

Petitioners have contended that

censorship has traditionally been a public

function. Respondent has never disputed

this principle and indeed appears’ to

concur .24/

How then does Respondent contend

that there is no genuine issue of fact on

its censorship constituting state action?

First, Respondent attempts to distinguish

23/ Respondent's assertion that it does

not act aS a censor (Ex. 87:22) is

belied by the true facts. Respondent

reviews the pictures and transparencies

and decides which ones it will return to

the owner thereof based on the content of

the film and its evaluation of whether

that content is or is not obscene. What

else could be involved in censorship?

24/ At App. A-81 we noted that at Ex.

90:19 Respondent seemingly conceded

that censorship has "traditionally been

the function of the state". In response

thereto Respondent discussed this test at

ape. A-127-130 and at no point disputed

that censorship has been "historically a

function of the state”.

-41-

Marsh, supra on the basis that its

"position would be analogous to the

company town [in Marsh] only if it

appeared that Kodak was an officially

sanctioned censor..." (Ex. 89:8 and App.

A-128). This is a strawman argument

because Marsh did not hold (or premise its

decision upon the basis) that the company

town was officially sanctioned to bar the

distribution of religious literature.

Secondly, Respondent claims an

unsupported exception to the public

function test because Respondent's

practice does not totally bar Petitioners’

publications. (Ex. 89:16 and App.

A-128.) Available alternatives do not

save infringement of free speech. (See

§8.2.3. above.)

Primarily, however, Respondent

claims that the public function test is

not applicable in private commercial

transactions and supports this claim

(App. A-126) by reading too literally (and

-42-

too much into) the dictum statement in

Flagg, supra that:

"the field of private commercial

transactions would be a particularly

inappropriate area into which to

expand" "the sovereign-function

doctrine". 436 U.S. at 163, 98 S.Ct.

1737.

Respondent interprets statement to

mean that the public-function doctrine is

inapplicable in all private commercial

transactions. We contend that is not how

that statement should be interpreted and

that it is not possibly what this Court

intended. The actual decision in Flagg is

as follows:

"Whatever the particular remedies

available under New York law, we do

not consider a more detailed descrip-

tion of them necessary to our conclu-

sion that the settlement of disputes

between debtors and creditors is not

traditionally an exclusive public

function.” 436 U.S. at 161, 98 S.Ct.

at 1736.

If (as Respondent argued) the

public function test were never applicable

in a private commercial transaction, there

would have been no reason for Flagg to

-43-

have discussed specifically the settlement

of disputes aspect thereof .23/

In Lugar, supra, this Court

declared that state action justifying a

claim under §1983 was shown in connection

with a private commercial transaction case.

The court at page 2752-3 relied upon the

same public function cases we have cited

above and nowhere Suggested their

inapplicability to private commercial

transactions. Other cases in which the

test has been applied in a private

commercial transaction include North

Georgia Finishing, Inc. v. Di-Chem, Inc.,

419 U.S. 601, 95 S.Ct. 719 (1975); Fuentes

v. Shevin, 407 U.S. 67, 92 S.Ct. 1983

(1972); and Sniadach v. Family Finance

Corp. of Bay View, 395 U.S. 460, 89 S.Ct.

25/ Verification that the decision was

limited to the dispute resolution as-

pect of private commercial transactions is

found in footnote 12 where the court

re-emphasizes that it is dealing with

"dispute resolution between creditors and

debtors".

~44-

1820 (1969).

But whether our analysis or that

of Respondent is correct, surely the two

literally inconsistent statements from

Flagg are worthy of resolution by this

Court.

8.3.3. State Action Arises from

Trademark and Patent

Grants. Petitioners' evidence is that the

unique superiority of Respondent's product

is a result of its ownership of numerous

patents and trademarks granted by the

United States and the various States,

(Ex. 271-313.) 26/ The third basis for

state action is that the State and federal

trademark and patent rights granted to

Respondent cause sufficient governmental

26/ Although Respondent argued that

alternative processors capable of equal

product are available, Respondent neither

offered evidence, nor argued, that other

processors do in fact piso equal

product or that its superiority is not

attributable to patents and trademarks

previously awarded to it.

-45-

involvement to amount to state action

under the "nexus test” (§1.1.3, above).

Whether such specific governmental

involvement is sufficient to constitute

state action has apparently never been

decided in a published opinion. (Respon-

dent concurs. App. A-122.) The distilled

question is whether the granting of trade-

mark and patent monopolies is more closely

aligned with the leasing of public property

and therefore state action is present

(Burton v. Wilmington, 365 U.S. 715, 81

S.Ct. 856 (1960)) or to the corporate

charter-license cases, and therefore state

action is absent.

Respondent argues that “the mere

grant of a corporate charter is a

ministerial government act which does

not...make the latter's business...'state

action'." (Ex. 84:25, App. A-120.)

Granting corporate charters may be

ministerial but granting patents is not,

and Respondent's attempted analogy to the

-46-

corporate charter cases is therefore

improper .27/

The charter-license cases cited by

Respondent are further inapplicable to

trademarks and patents because unlike the

former, the latter are the result of a

direct grant of powers and rights pursuant

27/ The Patent Office officers perform more

than ministerial acts in reviewing a

patent application, in awarding rights and

powers pursuant to the Constitution, and

in entering into a contract with the

patentee regarding the scope and exercise

of these constitutional powers. Discre-

tion and judgment is exercised by the

officers of the Patent Office at every

step in the patent procedure until such

time as the bargain is struck with the

patentee. See N. 18, App. A-79. Jackson

v. Metropolitan Edison Co., 419 U.S. 345,

95 S.Ct. 449 (1974), relied on by Respon-

dent (App.A-121) is distinguishable first,

because the Court in Jackson doubted that

the state had ever granted or guaranteed

the power Company a monopoly (419 U.S. at

352 95 S.Ct. 454), whereas the grant of a

patent or trademark is clearly a grant of

monopoly and secondly, because this Court

there asserted that the governmentally

created rights must have a close relation-

ship to the challenged authority, a fact

here true. The same distinction was drawn

in poe v. St. Vincent's Hospital, 523

F.2 ’ (9th Cir. 1975) also relied

upon by Respondent.

-47-

to the U.S. Constitution (Art. I, §8,

cl.8), “are issued not for private benefit

but for the public good" (Sears Roebuck &

Co. v. Stiffel, Co., 376 U.S. 225,230, 84

S.Ct. 784,788 (1964)) and “in rewarding

useful invention, the ‘rights and welfare

of the community must be fairly dealt

with.'” (Griffith Rubber Mills v. Hoffar,

313 F.2d 1,3 (9th Cir. 1963)).

8.4. Defendant Did Not Prove

Absence Of Justiciable Con-

troversy To Deprive Petitioners' Trial For

Declaratory Relief. Respondent's position

regarding the fourth count (Ex. 54:20)

would force Petitioners to incur’ the

enormous risks and injury which arise when

Petitioners submit film to Respondent and

then the transparencies are not returned,

and to file repeated lawsuits seeking the

mere return of these by then stale trans-

parencies. Declaratory relief is the

proper means of obtaining a definitive

adjudication of rights, thereby avoiding

~48-

litigation each time a wrong is committed.

See Roe v. Wade, 410 U.S. 113,126, 93

S.Ct. 705,713 (1973). This case presents

a classic example of an action “capable of

repetition, yet evading review". Roe,

Supra, 410 U.S. at 125, 93 S.Ct. at 713.

Under §8.2 above, we show that for

several separate reasons the state could

not engage in this prior restraint of free

speech. If application of §§311.2 and

1461-5 requires Respondent to censor

Petitioners’ pictures, then the same does

indirectly what the state cannot do

directly and pursuant to Adickes (§8.3.1,

supra) such application to a film processor

must be declared unconstitutional.

8.4.1. There Is Justiciable

Case. The granting the

summary judgment motion on the declaratory

relief (28 U.S.C. §2201) count was based

on the conclusion that “there is no case

or controversy" (App. A-41:19) but rather

-49-

this was "a collusive action" (App. A-42:5)

because "Respondent tells us it has no

interest in upholding either set of laws"

(App. A-41:25). The authorities cited not

only by Respondent, but also by the

District Court, as support for reaching

this conclusion as a matter of law are

inapplicable in that each is premised on a

finding of a collusive action or moot case,

and this case is neither.28/ there is

surely not one shred of evidence or

argument by Respondent that it joins, or

is in collusion, with Petitioners in their

attack on the validity of the application

of the laws here in question. To the

contrary, Respondent's Answer and Motion

for Summary Judgment prove adversity.

28/ Typical is the statement from Moore v.

Charlotte-Mecklenburg Board of Educa-

tion, 402 U.S. 47,48, 91 S.Ct. 92,

1) quoted in Respondent's moving papers

(Ex. 94:28) that "We are thus confronted

with the anomaly that both litigants

desire precisely the same result...”.

-50-

Avoidance of collusion is assured by 28

U.S.C. § 2403. The District Court's

conclusion that as a matter of law this

would be “a collusive action” is in

error.29/ 1¢ Respondent had no interest

29/ The District Court relied upon U.S. v.

Johnson, 319 U.S. 302, 63 S.Ct. 1075

(1943) and Rutolo v. Rutolo, 572 F.2d 336

(lst Cir. 1978). (Ex. 393:24.) In

Johnson the landlord defended a tenant's

action on the ground that the Emergency

Price Control Act of 1942 was unconsti-

tutional, and the Supreme Court upheld the

government's claim of collusion in a

motion to reopen the case. 28 U.S.C.

§2403 protects against this risk, and

there is no evidence of collusion here.

In Ruotolo, supra, a creditor moved

to disqualify a retired bankruptcy referee

from serving as attorney for the debtor in

possession. After denial of the motion

the government intervened, following which

the creditor withdrew its obiection, and

the retired referee ceased to represent

the debtor. Nonetheless the government

appealed the denial of the disqualification

motion. The Court of Appeals held that

the matter had become moot and that there

remained no justiciable issue by reason

thereof. Further the Court found that for

the government to proceed it had to have

an independent basis, and that once the

parties had resolved their differences,

the government had no such basis, and

further that its decision would merely be

an advisory opinion. None of the facts in

Ruotolo are even tangently similar (cont'd)

-8]-

in defending the constitutionality of the

statutes and if all it wanted to do was be

secure against possible prosecution, why

did it answer the fourth count?30/

29/ (cont'd) to those here and the decision

in no way Supports a conclusion that there

is not a dispute requiring declaratory

relief in this case.

3C/ The other authorities cited by Respon-

dent are equally inapplicable. In

Golden v. Zwickler, 394 U.S. 103, 89 S.Ct.

956 (1969), the Supreme Court found that

the case or controversy had become moot.

In Mendez v. Heller, 530 F.2d. 457 (2d Cir.

1976), the plaintiff sought to challenge a

New York two-year residency requirement

prior to actually having attempted to file

for divorce in the appropriate New York

State Courts. The courts are. more ready

to review threatened deprivations of First

Amendment Rights than in other situations.

Zwickler v. Koota, 389 U.S. 241,254, 88

S.Ct. 391,399 (1967); Wolff v. Selective

Service Local Board No. 16, 372 F.

n Se ¢ 67). In contrast to the situ-

ation in Mendez, all possible events have

occurred to create an actual dispute be-

tween the parties. Plaintiffs have ten-

dered film for processing to defendant and

defendant has refused to return the films

to Plaintiffs. Thus, the “exigent adver-

sity” mentioned in Mendez exists. Finally,

the contention that Granfield v. Catholic

University of America, 530 F.2d 1035 (D.C.

Cir. 1976) requires the joinder of repre-

sentatives of the bodies enacting the stat-

utes is in error as demonstrated by other

cases cited by Respondent itself.

-§2-

Here Respondent complains that it

engages in censorship and _ confiscation

because the law commands it to do so. An

action to recover stale pictures is

worthless. Yet the lower courts would

place Petitioners in a position where they

have no meaningful remedy. Petitioners

have no basis for suing the state or

federal governments because Petitioners

have no information that the governments

ever intended the statutes to be applied

as Respondent claims they are compelled to

apply them. If in addition Respondents

are free from attack because they are only

following the law3l/, then some remedy

must be available to Petitioners to stop

31/ Respondent's contention (App. A-129)

that prosecution of a film lab employee

has already been determined as proper

based upon Gold v. United States, 378 F.2d

588 (9th Cir. 1967) is in error. The

participation by the defendant in Gold was

far more then merely returning developed

film. Additionally the film in Gold was a

completed motion picture, not merely an

intermediate step in the publication of a

magazine.

-§3-

the unconstitutional application of these

statutes and declaratory relief is that

remedy.

8.5. Plaintiffs Did Not Waive

Claims. At App. A-116 Re-

spondent argued that it is not obligated

to return material depicting matters des-

cribed in its notice because that notice

constituted part of a contract between

defendant and plaintiffs. There in N. 6

Respondent concedes that the District

Court did not so find. We therefore do

not discuss same except to note that at

App. A-99-102 we demonstrate that Respon-

dent's position is unsound for a number of

reasons including that Petitioners did not

agree to Respondent's policy, there is no

waiver from Respondent's unilateral notice,

Respondent's notice at most is a contract

of adhesion and is not enforceable, and

First Amendment rights are not waivable.

8.6. Motion Premature. Summary

judgment should not be grant-

-54-

ed until such time as: the party opposing

the motion has had an adequate opportunity

to conduct discovery.32/ the foregoing

rule is particularly true in situations

where the facts necessary to oppose the

motion are in the possession of the moving

party, and here Respondent asserts its

Subjective intent is a material issue.

Respondent's motion herein was made within

a few days after counsel for the parties

first met to discuss discovery and before

any discovery had been taken. Thus,

Respondent's motion was premature, and

should therefore have been denied.

9. CONCLUSION - RELIEF REQUESTED. By

reason of application of certain

32/ Rule 56(f) of the Federal Rules of

Civil hae ag See also Hospital

Building Co. Trustees Of Rex Hospital,

425 U.S. 738, “56 S.Ct. 1848 (1976); Pollet

v. Columbia Broadcasting System, Inc.

U.S. 464, 82 S.Ct. 486 mm Ed. 2d aaa

(1962); Timberlane Lumber A v. Bank of

America N.T T.S.&A. 549 F.2d 597 (9th Cir.

1976); Illinois State Employees Union

Council 34 Etc. v. Lewis 473 F.2d 561,565

n.8 (7th Cir. 1972).

-55-

statutes Respondent has injected itself

into the editorial process of Petitioners’

publications, as a censor. Respondent's

power to influence Petitioners arises by

virtue of trademark and patent grants. An

absence of State action cannot be declared

as a matter of law. This application of

the statutes, improperly places at risk

those uninvolved with the publication

itself resulting in Respondent's redefining

obscenity in a manner never approved by

any court, setting itself up as a censor to

review, without any court intervention, the

content of proposed photographs, and con-

fiscating those photographs it deems

obscene. Pursuing a declaration of the

unconstitutionality of such application

must be permitted. Petitioners cannot be

relegated to a valueless common law action

for return of stale pictures when it is the

very existence of these laws whose appli-

cation violates Petitioners' freedom of

speech and press. While we contend the

-56-

state action element has been proved as a

matter of law, we need only show that the

District Court's decision that as a matter

of law there is an absence of state action,

is in error.

We pray that this Court grant this

Petition so that it may resolve the con-

flicting decision between the circuits and

settle important federal questions not

heretofore resolved.

Respectfully submitted,

RICHARD D. AGAY for

COOPER, EPSTEIN & HUREWITZ, APC

Attorneys for Petitioners

(Excerpts under separate cover)

-57-