Petitioners Brief — Fort Wayne Books, Inc. v. Indiana

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JOSEPH F. SPANIOL, UR.

ree

FORT WAYNE BOOKS, INC.,

Petitioner,

vs.

STATE OF INDIANA, et al.,

Respondents.

— '

ON PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME COURT OF INDIANA

- LY.

x MA

BRIEF FOR PETITIONER

FORT WAYNE BOOKS, INC.

Joux H. Westox*

Davin M. Brown

G. Raxpatt Garrov

Browx, Weston & Sarno

433 N. Camden Drive, Suite 900

Beverly Hills, CA 90210

(213) 550-7460

Counsel for Petitioner

Fort Wayne Books, Inc.

*Counsel of Record

Lee J. Kier

8252 EF. Lansing Rd.

Suite 101

Durand, MI 48429

Of Counsel

COCKLE LAW BRIEF PRINTING CO.. (800) 225-0ve4

or cal! coilect (402) 342-2831

1. Is Indiana’s civil RICO statute, authorizing pre-

trial padlocking and post-trial forfeiture of entire com-

municative businesses solely on the basis of two or more

obscenity offenses, facially unconstitutional under the First

Amendment as a prior restraint on protected expression!

2. Do the forfeiture, padlocking and other sanctions

of Indiana’s civil RICO statute constitute an overly broad

means of regulating the dissemination of obscenity in that

they permanently restrain in the most sweeping fashion

the prospective exercise of First Amendment rights?

3. Even in their operation upon materials alleged to

be obseene, do the Indiana civil RICO statute’s pre-trial

sanctions of mass seizure and padlocking lack sufficient

First Amendment procedural safeguards where they can

be imposed based solely upon an ex parte probable cause

determination of obscenity?

4. Do seizure, padlocking and forfeiture sanctions

such as those upheld by the Indiana Supreme Court, vio-

late the First Amendment by unduly chilling the exercise

of protected expression?

‘i

LIST OP PARTIES

The following is a list of all parties of record in the

Indiana Supreme Court in No. 87-470 in addition to those

appearing in the caption of the present petition:

CINEMA BLUE OF FORT WAYNE, INC,

EROTICA HOUSE BOOKSTORE, INC., 4447 COR-

PORATION, WORLD VIDEO SYSTEMS, ISSI

THEATER CORPORATION, PLAZA ENTERTAIN.

MENT CENTER and BURTON GORELICK ap-

peared as appellants in the Indiana Supreme Court.

STEPHEN M. SIMS, Prosecuting Attorney for

the 38th Judicial Cireuit, and STEPHEN GOLD.

SMITH, Prosecuting Attorney for the 19th Judicial

Cirenit, appeared as appellees in the Indiana Supreme

Court.

As previously indicated by letter to the Clerk of this

Court, petitioner FORT WAYNE BOOKS, INC. believes

that 4447 CORPORATION, WORLD VIDEO SYSTEMS,

ISSI THEATER CORPORATION, CINEMA BLUE OF

FORT WAYNE, INC., and EROTICA HOUSE BOOK-

STORE, INC. have no interest in the outcome of this peti-

tion. Accordingly, pursuant to Supreme Court Rule 19.6,

petitioner believes the respondents before this Court to

be :

THE STATE OF INDIANA

STEPHEN M. SIMS

STEPHEN GOLDSMITH

PLAZA ENTERTAINMENT CENTER

BURTON GORELICK

* There are no entities to list pursuant to this Court’s

Rule 28.1.

iti

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES 0 Vv

CE EEE 1

JURISDICTION 2

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED 3

STATEMENT OF THE CASE 00000000 4

CE _

CO EE ee, ©

SUMMARY OF ARGUMENT 200 Se 15

LL 22

I WHERE THE ONLY PREDICATE OFFENSES

ARE OBSCENITY VIOLATIONS, INDIANA’S

CIVIL RICO STATUTE VIOLATES THE

FIRST AMENDMENT ON ITS FACE, BOTH

AS A PRIOR RESTRAINT AND AS AN OVER-

LY BROAD STATUTE WHICH RESTRAINS

A SUBSTANTIAL AMOUNT OF CONSTITU-

TIONALLY-PROTECTED SPEECH .000

A. Standard Of Review .’

B. As Applied To The Predicate Offense Of Ob-

scenity, Both The Pre-Trial And Post-Trial

Sanctions Of Indiana’s Civil RICO Statute

Are Facially Unconstitutional As —

sible Prior Restraints 0000000000...

C. The Indiana Statutory Scheme Must Also

Fall When Analyzed As An Overly Broad

Law Which Restricts Substantial Amounts Of

Constitutionally-Protected Expression

TABLE OF CONTENTS—Continued

Page

D. This Court Has Jurisdiction To Consider

The Facial Validity Of Both The Pre-trial

And Post-trial Sanctions Authorized By In-

diana’s Civil RICO Statute 0... 43

Il EVEN IN THEIR OPERATION UPON MATE-

RIALS ACTUALLY ALLEGED TO BE OB-

SCENE, THE PROCEDURES AUTHORIZED

BY THE INDIANA RICO STATUTE VIOLATE

VIRTUALLY EVERY PROCEDURAL SAFE-

GUARD REQUIRED BY THE FIRST AMEND-

a . 46

Ill AS APPLIED TO THE PREDICATE OFFENSE

OF OBSCENITY, THE RICO STATUTE’S SEI-

ZURE, FORFEITURE, AND OTHER CIVIL

REMEDIES CREATE AN UNPRECEDENTED

AND CONSTITUTIONALLY IMPERMIS-

SIBLE CHILLING EFFECT UPON A VAST

RANGE OF PROTECTED EXPRESSION 00. 5]

ENE <incceimssncsiistieninnaditialimabanamanatananaienis 62

TABLE OF AUTHORITIES

Page

I’eperRaAL Cases:

Aptheker v. Secretary of State, 378 U.S. 500 (1964) .... 40

Arcara v. Cloud Books, Inc., — U.S. —, 106 8.Ct.

Dn ae SB A 15, 17, 35, 36, 42

Arkansas Writers’ Project, Inc. v. Ragland, —

ee lg Se le "=o a 22

Avon 42nd Street Corp. v. Myerson, 352 F.Supp.

8k eh SE er neaeencnee 37

Bantam Books, lnc. v. Sullivan, 372 U.S. 58 (1968) ........ 29, 50

Bayside Enterprises, Inc. v. Carson, 470 F.Supp.

1140 (M.D.Fla. 1979) 0 le ag RS Ree 37

Blount v. Rizzi, 400 U.S. 410 (197V) oe = BH

Brockett v. Spokane Arcades, Inc., (Brockett 1),

eR Ran eae Aida tS Be BD, OF

California ex rel. Cooper v. Mitchell Brothers, 454

a % 2 — ; ees Be EE te ET ok da 19, 49

Carroll v. President and Commissioners of Prin-

cess Anne, 393 U.S. 175 (1968) .................... a AE ta a 29

Chulchian v. City of Indianapolis, 477 F.Supp.

128 (S.D.Ind. 1979), aff’d., 633 F.2d 27 (7th Cir.

RR Ree ne eae ee a eae 38

City of Paducah v. lnvestment Entertainment,

be ) fF Fo >. ya 37

Cornflower Entertainment, Inc. v. Salt take City

Corp., 485 F.Supp. 777 (D.Utah 1980) 2 38

Council for Periodical Distributors Ass'n v. Evans,

642 F.Supp. 552 (M.D.Ala. 1986) 0 «= OM

(‘ox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975) — 44

Entertainment Concepts, Inc. Ill v. Maciejewski,

RS EE 37

TABLE OF AUTHORITIES—Continued

Fernandes v. Limmer, 663 F.2d 619 (5th Cir. 1981) 38

Fort Wayne Books, et al. v. Indiana, et al., U.S.

Sup.Ct. Docket 26 A-TB4 oo ccccccccccccscsscssvmerrsnemeretemeesesnsn 10

Freedman v. Maryland, 380 U.S. 51 (1965) 34, 35, 46, 47, 49

Gayety Theaters Inc. v. City of Miami, 719 F.2d

gS Ee 37

Genusa v. City of Peoria, 475 F.Supp. 1199 (C.D.

Ill. 1979), aff'd. 619 F.2d 1208 (7th Cir. 1980) 37

Hamling v. United States, 418 U.S. 87 (1974) . a7

Heller v. New York, 413 U.S. 483 (19738) passim

Hudson Distributors v. Eli Lilly, 337 U.S. 386 (1964) . 44

Huffman v. Pursue, Ltd, 420 U.S. 592 (1975) 37

Hustler Magazine v. Falwell, — U.S. —, 108 S.Ct.

i ea FSS res rene CuO te SC 20, 52

Intern. Soc. for Krishna Consciousness v. Eaves,

601 F.2d 809 (Sth Cir. 1979) cee 38

Jenkins v. Georgia, 418 U.S. 153 (1974) —.

J-R Distributors, Inc. v. Eikenberry, 725 F.2d

2 (9th Cir. 1984), rev'd on other grounds sub

nom. Brockett v. Spokane Arcades, Inc., 472 U.S.

SII. sestihseeierpernieseeniesitintetinetietntsata daar tence 37

Kingsley Books, Inc. v. Brown, 354 U.S. 4386

ee es dd, 26, 29, 30

Kolender v. Lawson, 461 U.S. 352 ( “(1983) oe

Lee Art Theatre, Inc. ishipnsnceste 392 U.S. 636

Lo-Ji Sales, Inc. v. New York, 442 U.S. 319 (1979) 32

Marcus v. Search Warrants, 367 U.S. 717 (1961) _. passim

— vii

TABLE OF AUTHORITIES—Continued

Page

Marks v. City of Newport, Ky., 344 F.Supp. 675

(E.D.Ky. 1972) .

Miami Herald Publishing Co. v. Tornillo, 418 U.S.

241 (1974) .................. 44

MIC. Ltd. v. Bedford siete 463 U.S. 1341

A Siete ace Sees BS I Seen 43

Miller v. California, 413 U.S. 15 (1973) #2, 54, 56

Mills v. Alabama, 384 U.S. 214 (1966) 00000 45

Minneapolis Star & Tribune Co. v. Minnesota

Commissioner of Revenue, 460 U.S. 575 (1983) 22, 23, 29

Mishkin v. New York, 383 U.S. 502 (1966) 20000 57

N.A.A.P. v. Alabama, 377 U.S. 288 (1964) 39, 40

N.A.A.C.P. v, Button, 371 U.S. 415 (1963) 0. 52

Natco Theatres Inc. v. Ratner, 463 F.Supp. 1124

(S.D.N.Y. 1979) . a TTT eid Se et 37

National Socialist Party v. Filan of Skokie, 432

U.S. 43 (1977) . a AE Meant: _.8, 20, 43, 48

Near v. ieaieste 283 U.S. 697 (981) . ret —: passim

New York v. Ferber, 458 U.S. 747 (1982) 0 40

New York Times Company v. Sullivan, 376 U.S.

FF eee 16, 20, 28, 60

Nihiser v. Sendak, 405 F Supp. 482 (N.D.Ind. 1974),

vacated and remanded on other grounds, 423

U.S. 976 (1975), order re-entered August 16,

1976 (unpub.), aff'd. 431 U.S. 961 (1977) 0... 37

Organization for a Better Austin v. Keefe, 402

ft = eee <=

Oregon Bookmark Corp. v. Schrunk, 321 sheila

639 (D.Oregon 1970) 0. lees

Vili

TABLE OF AUTHORITIES—Continued

Paris Adult Theatre I v. Slaton, 413 U.S. 49 (1973) ... 56

Penthouse International, Ltd. v. petaestiede 610

Pe 54

Pollitt v. Connick, 596 F.Supp. : 261 (E.D.La. 1984) 37

Pope v. Illinois, — U.S. —, 107 S.Ct. 1918 (1987) 56

Quantity of Books v. Kansas, 378 U.S. 205 (1964) 1S, 19,

31, 32, 45, 47

Renaissance Arcade and Bookstore v. County of

Cook, — U.S. —, 106 S.Ct. 9 (1985) Sana

Roaden v. Kentucky, 418 US. 496 (1973) 18, 33, 35

Roth v. United States, 354 U.S. 476 (1957) — 42, 52, 58, 59

San Juan Liquors v. Consol. City of Jacksonville,

480 F.Supp. 151 (M.D.Fla. 1979) . ait 37

Schad +. Borough of Mount 1 Ephraim. 452 US. 61

(1981) sisaiesehlstesediiale eine as 13, 26, 41

Schneider v. State, 308 US. 147 (1989) 23

Sherwin v. United States, 572 F.2d 196, cert. de-

Smith v. California, 361 U.S. 147 (1959) 57, 58, 59

Smith v. Goquen, 415 U.S. 566 (1974) 0 CS

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

Seclee « v. Slaton, 415-©.S. 333 (1974) . a

Speiser v. Randall, 357 U.S. 513 (1958) 20, 48, 49, 53

Thornhall v. Alabama, 310 U.S. 88 (1940) 00 52

Tietel Film Corp. v. Cusack, 390 US. 139 (1968) 35

United States v. —— 674 F sentnanl 104 (ELD.

Va. 1987) . scouts aes 8

TABLE OF AUTHORITIES—Continued

United States v. Thirty-Seven Photographs, 402

U.S. 363 (1971) 35, 48

Vance v. Universal Amusement Co., 445 U.S. 308

0 passim

Walker v. City of Birmingham, 388 U.S. 307 (1967) —. 47

Yuclan Entcrvrises Inc. v. Arre, 488 F.Supp. 820

(D.Hawaii 1980) _. 37

Strate Court Cases:

4447 Corporation v. Goldsmith, 479 N.E.2d 578

(Ind. App. 1985) 2,15

4447 ew v. Goldsmith, 304 N.E.2d 559

fa 1,2

Alexander v. City of St. — 303 Minn. 201, 227

N.W.2d 370 (Minn. 1975) ~ . 38

City of Delevan v. Tho-nes, 31 ao

N.E.2d 190 (1975) . eS

City of Minot v. Central Ave. News, Inc., 308

N.W.2d 851 (N.D. 1981) . . F

City of Seattle v. Bittner, 81 Wash2d 747, 505

P.2d 126 (1973) 38

Commonwealth ex rel. Davis v. Van Emberg, 347

A.2d 712 (Penn. 1975) 37

General Corp. v. Sweeton, 320 So.2d 668 (Ala.

1975), ak den. 425 U.S. 904 (1976) . aie ae

Giarrusso v. D'lberville huscoeate 295 So.2d 891

(La.App. 1974) . aaritieed scueliiniennes WO

Gulf States Theaters oer Louisiana v. heii,

287 So.2d 480 (La. 1974) . - 37

TABLE OF AUTHORITIES—Continued TABLE OF AUTHORITIES—Continued

State ex rel. Ewing v. “Without a Stitch”, 307 N.E.

2d 911 (Ohio 1974) .

State ex rel. Field v. Hees, 40 Pd 1165 (Otte.

Hemar Theatres Inc v. City of Newark, 150 NJ.

Super. 14, 374 A.2d 502 (1977) ~ ae

Kansas v. A Motion Picture Entitled “The Bet”,

°19 Kan. 64, 547 P2d 760 (1976) a

Kuhns v. Santa Cruz Co. Bd. of Sup'r rs., 128 Cal.

App.3d 369, 181 Cal. Rptr. 1 (1982) . os

Mi.chem rv. State ex rel. Schaub, 20 So2d 883

New Rivieria Arts Theatre v. Davis, 219 Tenn.

652, 412 S.W.2d 890 (1967) |

Parish of Jefferson v. Bayou Landing I Ltd., Inc., ;

BHO SoD VG (Lam. 1977) vusene, Gearovns:

People v. J.W. Productions, 413 N.YS.2d 552 a

(N.Y.C.Cr.Ct. 1979) . snc ON ea

People ex rel. Busch v. Projection Room Theater,

17 Cal.3d 42, 130 Cal. oY 328, 550 P2d 600 ;

(1976), cert. den. 429 U.S. 922 (1976) = moan COane

People v. Sequoia — 518 N.F.2d 775 (1. I.App. Indiana Code

1965) ____ ae §§ 34-4-30.5-1 through 34-4-30.5-6 : 3,

Perrine v. Municipal ¢ ( ‘ourt, 5 as 656, 97 Cal. 9

Sanders v. State, 231 Ga. 608, 203 S.E.2d 153 3 (1974). 37, 50 § 34-4-30.5-2(3) a oe

Sewell v. Georgia, 238 Ga. 495, 233 S.E.2d 187, § 36-4.305-2(4) aan

Society to Oppose Pornography, Inc. v. Thevis, 5-3

State ex rel. Blee v. Mohney Euterprises, 289 .

Constitutional Provisions:

U.S. Constitution Amendment 1 passim

U.S. Constitution Amendment 14, Section 1 3

S$ SS 8&8 & 8B

cone & RRB R

xii No. 87-470

TABLE OF AUTHORITIES—Continued ——u-—

Page

§§ 35-49-1-1 through 35-49-1-10

§ 354921 3 Supreme Court of the United States

§§ 35-49-3-1 through 35-49-3-4 200 October Term, 1987

MiscELLANEOUS: ——

Newsweek, February 1, 1988, p. 44 55

New York Times, January 12, 1988 61 FORT WAYNE BOOKS, INC,

Attorney General's Commission on Pornography, Pottioner,

Final Report, p. 498 (July 1986) 62 =

STATE OF INDIANA, et al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME COURT OF INDIANA

—- -—-0o

BRIEF FOR PETITIONER

FOKT WAYNE BOOKS, INC.

—_— *

The opinion of the Indiana Supreme Court is reported

as 4447 Corporation v, Goldsmith, 504 N.E.2d 559 (Ind.

1987) and is printed at Cert. App.' 1-22; the order and

opinion denying rehearing are reported at 509 N.E.2d 174

(Ind. 1987) and are printed at Cert. App. 104-112. The

opinion of the Indiana Court of Appeals is reported as

4447 Corporation v. Goldsmith, 479 N.F.2d 578 (Ind. App.

1985) and is printed at Cert. App, 28-98.

The Supreme Court of Indiana entered its opinion

in this matter on March 2, 1987 and denied rehearine on

June 18, 1987. The certiorari petition herein was filed

within 90 days of the latter date.

The Indiana Supreme Court's opinion constitutes a

final judgment in a civil case upholding the constitution-

ality of various pre-trial restraints on constitutionally pro-

tected expressiotr imposed pursuant to Indiana’s state

RICO law. The opinion also upheld against constitutional

attack the post-trial forfeiture sanctions authorized by

that same law. Accordingly, this Court has jurisdiction

pursuant to 28 U.S.C. § 2101(e).

—)- —

;

UNITED STATES CONSTITUTION

Amendment 1

*‘Congress shall make no law . . . abridging the free-

dom of speech, or of the press... .”’

Amendment 14, Section 1

“All persons born or naturalized in the United States,

and subject to the jurisdiction thereof, are citizens of the

United States and of the State wherein they reside. No

State shall make or enforce any law which shall abridge

the privileges or immunities of citizens of the United

States; nor shall any State deprive any person of life,

liberty, or property, without due process of law; nor deny

to any person within its jurisdiction the equal protection

of the laws.”

PROVISIONS FROM INDIANA CODE

The pertinent provisions of the Indiana Code are pre-

sented in Appendix F accompanying the certiorari petition

(Cert. App. 113-125), ineluding: IC §§ 34-4-30.5-1 through

34-4-30.5-6 (Indiana's civil RICO statute—Cert. App. 113-

118); §§ 35-45-6-1 and 35-45-6-2 (Indiana's criminal RICO

statute—Cert. App. 118-120); and §§ 35-49-1-1 through

35-49-1-10, § 35-49-2-1, and §§ 35-49.3-1 through 35-49-34

(Indiana’s criminal provisions defining and punishing ob-

seenity violations—Cert. App. 120-125). The civil and

criminal RICO statutes are also reprodaced in Appendix

A of this Brief (App. 1-8).

STATEMENT OF THE CASE

Introduction

This case involves the question whether the seizure,

padlocking and forfeiture sanctions authorized by a state’s

RICO statutes are constitutionally permissible as applied

to those whose only alleged offenses involve the sale or

exhibition of two or more allegedly obscene items.

A single judgment was rendered below by the Indiana

Supreme Court in two eases consolidated on appeal, one

involving a civil RICO action against three adult book-

stores in Indianapolis? and one involving a civil RICO

action against three adult bookstores in Fort Wayne.’

The only petitioner before this Court is Fort Wayne Books,

Ine., the owner of one of the three bookstores in the Fort

Wayne litigation.

Pacts

Petitioner Fort Wayne Books, Ine. operates Fort

Wayne Books, an adult bookstore in Indiana. From ap-

proximately April of 1979 te March 19, 1984, petitioner's

bookstore offered for sale thousands of different sexually-

oriented books, magazines, motion picture films and video-

tapes, all presumptively entitled to constitutional pro-

tection. The store also operated numerous motion picture

viewing booths wherein a customer could privately view

any of a number of different motion picture films or

videotapes.

2 Goldsmith v. 4447 Corporation, et al. Marion County Cir.

S 83-1788 (Hamilton County Cir. Ct. 283-346 after change

venue).

’ Sims, et al. v. Fort Wayne Books, inc., et al, Allen County

Cr. Ct. 284-446.

On March 19, 1984, respondents Stephen M. Sims and

the State of Indiana filed a complaint (J.A. 7-49) against

petitioner and others in the Cireuit Court of Allen County,

Indiana, charging them with violation of Indiana’s state

civil RICO statute (IC § 34-4-30.5-1 ef seq.) and seeking

the full range of statutory sanctions including license revo-

cation, corporate dissolution, and forfeiture not only of

all of petitioner’s assets, but also of assets not owned by

the corporation (such as rented realty) used in alleged

violation of the statute. (J.A. 46-49.) The only predi-

cate offenses asserted in support of the civil RICO claim

were alleged violations of Indiana’s obscenity statutes.

On that same date, these respondents filed a ‘‘ Verified

Petition for Seizure of Property Subject to Forfeiture’’

against petitioner and the other defendants, seeking an

ex parte order authorizing respondents to padlock peti-

_tioner’s bookstore and two other bookstores and to seize

all of their inventory, equipment and corporate assets.

(J.A. 51-78.) This petition was supported by a police offi-

cer’s probable cause affidavits alleging that the corporate

owners of these bookstores were part of a single ‘‘enter-

prise’’ and that they and their employees had heen con-

victed of certain obscenity offenses* which, according to the

* The officer's affidavit and supporting exhibits showed con-

victions of petitioner Fort Wayne Books, Inc. in three cases

brought under the former obscenity statute (§ IC 35-10.1-2) and

of employees under that same former statute, most of

the result of negotiated pleas. The officer's affi-

no convictions of the corporation under the new

yee sta (the only one made punishable as a predicate

) but al two cases involving employees who

entered into negotiated pleas under the new obscenity statute.

(Continued on following page)

officer, constituted valid ‘‘predicate offenses’’ triggering

application of the RICO statute.’ The officer also alleged

that he had personally viewed a number of motion picture

films and videotapes exhibited in petitioner’s store and

had concluded that they were legally obscene. The officer

made similar allegations as to the other two bookstores

named in the complaint.

The same day, March 19, 1984, an ex parte hearing was

held on the state’s forfeiture petition (F.W.R. 285-317)

without any notice of the hearing to the defendants.

Following the ex parte hearing, the trial court imme-

diately concluded that there was probable cause to believe

that each of the defendants had committed two or more

violations of the state’s obscenity laws in violation of the

civil RICO statute. Accordingly, the trial court, without

any notice to petitioner or the other affected businesses,

issued an order commanding the immediate padlocking of

(Continued from previous page)

See F.W.R. 43 and 45. It is not clear from the exhibits attached

in support of the officer's affidavit that the conduct in the latter

two cases occurred at petitioner's bookstore. See F.W.R. 96, 98,

164 and 166 (listing a different street address and different store

name as the source of the conduct which resulted in the ne-

gotiated pleas). Moreover, the two cases involving convictions

under the current obscenity statute involved only conduct which

occurred before the 1983 amendment to the RICO statute

_ violations of the new obscenity statute a predicate RICO

offense.

’ Petitioner does not agree that any of the convictions al-

leged in the officer's affidavit constitute valid predicate offenses

under Indiana's RICO statute. However, resolution of this issue

will involve complicated issues of statutory construction not here

relevant. Of course, since the seizure application was made ex

parte, there was no opportunity for petitioner to force the state

to prove that the requisite predicate offenses had in fact been

committed.

—s

all three bookstores and seizure of their entire contents.

(J.A. 79-83.) The items alleged to be obscene comprised

only a tiny fraction of the items actually seized.

On that same day (March 19, 1984), the authorities

padlocked all three bookstores and denied access to them

by store employees and the public alike. No trial date was

set, nor has one ever been set in this case.

On March 23, 1984, petitioner filed a motion in the

trial court to vaeate the ex parte seizure and padlocking

order (F.W.R, 327-334), asserting that the ex parte order

lacked the numerous procedural safeguards required by

the First Amendment and also, in any event, was an un-

constitutional prior restraint of First Amendment rights.®

On March 29, 1984, a hearing was held on petitioner’s

motion to vacate the ex parte order and the court denied

the motion.’ (F.W.R. 524.)

The following day, after the bookstores had already

been padlocked, the authorities, again without notice, com-

menced removal of the entire contents of the three estab-

lishments, including tens of thousands of books, magazines

and films, as well as items such as film projectors, cash

registers and bookracks. (See Cert. App. 36 and F.W.R.

548.) As mentioned above, the sole basis for these mass

seizures was the allegation of prior obscenity offenses. No

judicial determination of obscenity or even probable ob-

scenity of the seized media preceded its confiseation, nor

was either alleged.

. An extensive Memorandum of Points and Authorities in

support of the motion to vacate appears at F.W.R. 425-468 and

additional exhibits thereto appear at F.W.R. 35-416.

¥ A transcript of this hearing is reproduced at F.W.R. 478-529.

On April 3, 1984 the defendants filed an Emergency

Motion for Inventory of Property Removed and/or for

Return of Property. (F.W.R. 548-551.) The next day,

partial inventories were filed by the sfate (F.W.R. 626-

635) and the motion was denied by the trial court (F.W.R.

625).

On April 3 and April 12, 1984, the defendants filed

with the trial court a petition and a supplemental petition

to certify its interim orders for interlocutory appeal

(F.W.R. 552 and 650). On April 18, 1984 the trial court

granted the request for certification (F.W.R. 697 and 700)

but denied a motion to stay its interim injunctive order

pending the interlocutory appeal. (F.W.R. 697 and 701.)

On April 27, 1984, the corporate defendants, including

petitioner, perfected their interlocutory appeal and simul-

taneously filed in the Indiana Court of Appeals an emer-

gency stay application, designated as Motion For Stay

(Modification) Of Interloeutory Injunction Without Bond

Pending Appeal. The stay application asserted, infer alia,

that under National Socialist Party v. Village of Skokie,

432 U.S. 43 (1977), a stay pending appeal was mandatory

because state law did not provide for immediate appellate

review of the interim ex parte closure order. [Petitioner's

other substantive and procedural challenges were presented

in the stay application as well as in its briefs filed on the

merits of the interlocutory appeal.

Despite repeated written and oral requests by peti-

tioner and the other appellants for immediate considera-

tion of their stay application pending the interlocutory

appeal,® there had still been no appellate ruling on the stay

application as of March 26, 1985, nearly a full year after

it was filed in the Court of Appeals. Throughout that time,

all three bookstores remained sealed and padlocked by

virtue of the trial court’s unreviewed ex parte closure

order.

On March 26, 1985, petitioner and the other bookstore

owners filed an application to Cireuit Justice Stevens of

° On May 2, 1984, five days after ae filed its appli-

cation for stay in the Court of Appea , respondent Sims filed

a Verified Petition For Transfer Of Case to the Supreme Court

of Indiana. Under Indiana law, the immediate effect of the

filing of such a petition is to divest the Court of Appeals of juris-

diction over both the stay application and the merits of the in-

terlocutory appeal. This procedural device placed the issues

relevant to the stay squarely before the Supreme Court of In-

diana. Nonetheless, after nearly three months, the Indiana Su-

preme Court denied the petition for transfer on july 17, 1984

and expressly remanded the stay application back to the Court

of Appeals without any decision.

Following the July 17th remand, petitioner expected a

prompt consideration of its stay application because, on the

same day the Petition For Transfer was filed (May 2, 1984), the

Court of Appeals transferred the Fort Wayne case to the division

of the Court of Appeals which had issued a similar stay in

the Indianapolis case. When no action had yet been taken

by the Court of Appeals on the stay application ty

23, 1984, petitioner filed another document in 4 ourt of

Appeals entitled “Request For Expeditious Ruling On Motion

For Stay (Modification) . . . .” Respondent Sims filed papers

on October 10, 1984 urging the Court to defer action on the

stay request pending ultimate resolution of the appeal.

In addition to the foregoing efforts of petitioner to secure

appellate consideration of its stay application, its counsel also

made repeated calls to the Clerk of the Court of Appeals and its

Commissioner advising them of the need for prompt considera-

tion of the stay application. Based on those calls, counsel for

petitioner were continually, but erroneously, led to believe that

action on the stay application was, in all likelihood, imminent.

this Court for a stay of the ex parte interim injunctive

order.’ Justice Stevens Ordered the State to respond to

petitioner's stay application by April 4, 1985.

On April 4, 1985, the Indiana Court of Appeals grant-

ed the year-old stay application, rendering moot the ap-

plication presented to Justice Stevens. Thereafter the

padlocks were removed and the three bookstores were

allowed to resume operations pending the outeome of the

appeal.

Petitioner's case was consolidated in the Indiana Court

of Appeals with a similar state RICO action filed against

an unrelated alleged ‘‘euterprise’’ consisting of three book-

stores in Indianapolis."° The primary differences between

the two cases are: (1) in the Indianapolis case there were

no allegations of any obscenity comrictions. Rather, that

RICO complaint was based exclusively upon probable cause

allegations of current obscenity violations at two of the

three stores (Cert. App. 7-8); (2) in the Indianapolis

ease, one of the three stores had not yet opened at the

time the court issued its er parte order and there was no

allegation that its premises had ever been used to violate

any obscenity law; (3) the unopened Indianapolis store

was ordered padlocked and sealed simply upon the allega-

tion that other stores allegedly owned by the same ‘‘enter-

prise’’ were believed to be violating the obseeuity law;

(4) the state enjoined the landlord of the yet-to-ope::

Indianapolis store from reletting the padlocked premises

to unrelated new tenants (see Amiens Brief of Burke

° Wayne Books, et al. v. indiana, et al, US. Sup.Ct.

LC eA-734.

soldsmith v. 4447 Corporation, et al., supra.

Mendenhall, filed in support of Petition for Writ of Cer-

tiorari); (5) while the Fort Wayne facts illustrate extreme

delay in jadicial review at the appellate level, the Indianap-

olis case involved extreme delay in judicial review of the

ex parte padlocking order at the trial court level."

On June 12, 1985, the Indiana Court of Appeals issued

a 2-1 decision ou the consolidated interlocutory appeal.

(Cert. App. 29-98.) Initially the Court summarized the

problem as follows:

‘**Without so much as an allegation of obseeuity as

to most of the bookstores’ inventories of films and

publications, the state ultimately seeks permanent

revocation of their business licenses as well as for-

feitures of these communicative materials and in-

strumentalities. The impact of such remedies upon

the availability of these materials is direct and un-

deniable—the state has effectively suppressed them

prior to distribution. The suppression of entire book-

stores inevitably affects protected as well as any un-

protected expression .. . ."’ (Cert. App. 43-44.)

Relying on extensive state and federal precedent, the

Court of Appeals found both the pre-trial sanctions of

seizure and padlocking and the various post-trial sanctions

of forfeiture, license revocation, ete. to be facially un-

cqnstitutional as impermissible prior restraints on the

distribution of materials not even alleged to be obscene.

(Cert. App. 44-58.) The court demonstrated that the

statute violates a wide variety of procedural safeguards

required by this Court’s prior decisions ‘‘even if the stat-

utes’ application were limited to materials alleged to be

" The procedural! facts of the Indianapolis case are set forth

chronologically at }.A. 100-102.

obscene.’ (Cert. App. 64.) Among other things, the Court

of Appeals observed:

‘First, the statutory scheme assigns the state no

burden of proof regarding obscenity, beyond the re-

quirement that plaintiffs adduce two predicate of-

fenses. Far from requiring that the state affirma-

tiv ly demonstrate the obscenity of all materials sub-

ject to seizure and forfeiture, the RICO/CRRA stat-

utes do not even permit the defendants to litigate the

issue and to establish the nonobscenity of most of the

seized books, films, and magazines."’ (Emphasis add-

ed.) (Cert. App. 67.)

The Court of Appeals concluded that the statute could

not be saved by « narrowing construction restricting for-

feiture to materials actually proved obscene. The court

concluded that the statutes’ lack of procedural safeguards

prevented such a limiting construction, and in any event,

such a construction **would be an unnecessarily tortuous

exercise’’ which would be “anomalous in relation to the

overall operation of the RICO CRRA statutes’’ and

*“‘would add nothing to the prosecutorial tools now af-

forded by our criminal bscenity statute." (Cert. App.

69.) The Court of Appeals stated that it would ‘not

ascribe to the legislative intent such an absurd result.”

(Cert. App 69.)

The Indiana Supreme Court reversed the decision

of the Court of Appeals. (Cert. App. 1-22.) In a split

opinion, the majority concluded that a statute authorizing

sanctions against protected expression need not be meas-

ured by First Amendment standards if the legislative pur-

pose was non-censorial, (Cert. App. 15-15.) Coneluding

that the stetutery purpose for meluding obscenity as a

predicate RICO offense was unrelated to a desire to sup-

press speech, the court held that the Court of Appeals

had erred in subjecting the statute to First Amendment

prior restraint analysis. Dissenting, Justice DeBruler dis-

agreed with the underlying premise of the majority opin-

ion, choosing to rely instead on this Court's holding most

recently articulated in Schad v. Burough of Mt. Ephraim,

452 U.S. 61, 68 (1981),) that ‘‘the standard of review is

determined by the nature of the right assertedly threat-

ened or violated rather than by the power being exercised

[by the state|.’’

The majority also rendered two significant eonstruc-

tions of the statute. First, it held that the state need not

allege any prior obscenity convictions but need only make

probable cause allegations of unproved obscenity viola-

tions. (Cert. App. 15-16.) Seeond, in upholding the In-

dianapolis order sealing the one location which had never

heen open, the court necessarily construed the statute so

that two or more obscenity violations at any store in a

chain of stores justifies closure orders direc'ed to any

or all of the stores in the chain.

Finally, the majority opinion rejected petitioner's

claim that the ex parte seizure and padlocking procedures

authorized by the statute lacked adequate procedural safe-

guards required by the First Amendment. (Cert. App. 17-

19.) The majority entirely ignored petitioner's conten-

tion that mass scizures of media materials can never be

conducted on the basis of ex parte probable cause deter-

minations.

The court's opinion addressed only one of petitioner's

procedural arguments—the contention that the imterun

restraints are void because they are of indefinite duration

and that the statutory scheme fails to require a final trial

court determination of obscenity within a fired or spect-

fied brief period. The court noted that the statute does

not require trial to be set within any specified period of

time after execution of the seizure order. However, rath-

er than reading into the statute a specific time limit for

bringing the case to trial, the court construed the statute

merely to require trial ‘within a ‘reasonable’ time.’* (Cert.

App. 18.)

The three bookstores involved in the Indianapolis lit-

igation have ceased doing business as have all of the Fort

Wayne bookstores except for petitioner, Fort Wayne

Books, Inv. However, the Indianapolis case is still pend-

ing as the authorities continue to seek a final order of

forfeiture against the landlord of the abated bookstore.

(His premises have remained closed under court order

since they were vacated by his former tenants, respondents

Gorelick and Plaza Entertainment Center.)

There has been no trial in the present Fort Wayne

action nor has a trial date been set.

Petitioner's store has been allowed to remain open

pending the outcome of this Court's decision. If the

state's actions are upheld, petitioner's store will be pad.

locked again pending trial.

The Indiana civil RICO statute as applied in this case

represents a stark challenge to the security of First Amend-

ment freedoms and an affront to virtually every funda-

mental principle of First Amendment jurisprudence since

Near v. Minnesota, 283 U.S. 697 (1931). Solely for alleged

obseenity offenses, the state padlocked three bookstores

for more than a year and seized property including en-

tire inventories of presumptively-protected materials. As

the Indiana Court of Appeals coneluded in facially inval-

idating the statute, this case “vividly illustrates the ra-

tionale for longstanding hostility to any system of prior

restraints under our Constitution.” 4447 Corporation v.

Goldsmith, 479 N.B.2d 578, 502 (Ind. App. 1985).

In its opinion upholding both the devastating pre-

trial and post-trial civil RICO sanctions, the Indiana Su-

preme Court rejected the Court of Appeals’ conclusion

that the entire statutory seheme violates the First Amend-

ment as a prior restraint. The Supreme Court held that

the post-trial forfeiture sanctions are immune from First

Amendment challenge as a prior restraint because there

was no proof of a censorious legislative purpose (Cert,

App. 10-15), flatly contradicting the recent unanimous po-

sition of this Court in Arcera v. Cloud Books, Ine., — US.

—, 106 S.Ct. 3172, 3177 (1986), that the usual strict seru-

tiny of the First Amendment applies “where it was con-

duct with a significant expressive element that drew the

legal remedy in the first place.” A majority of this Court,

as represented by Justice O'Connor's concurring opinion,

indicated that in contrast to the state action upheld in

Avcara (the closure of a bookstore predicated upon com-

pletely non-expressive conduct), a different result would

obtain in this case. The use of a nuisance statute (or sim-

ply to apply a different label, a “racketeering” statute)

“as a pretext for closing down a book store because it sokl

indecent books . . . would clearly implicate First Amend-

ment concerns and require analysis under the appropriate

First Amendment standard of review,” ic., the extremely

strict serutiny of the prior restraint doctrine, 106 S.Ct.

at 3178 (Justice O'Connor, coneurring).

This Court has continually reaffirmed that resert to

talismanic labels in no way avoids the strictures of the

constitutional guarantees of free speech and press. See

New York Times v. Sullivan, 376 U.S, 24, 268 (1964).

Whether the State labels an obscenity offense a “nuisance”

or “racketeering,” the same First Amendment) principles

prohibit the closure or forfeiture of an entire communica

tive business solely on grounds of unprotected expression,

Indeed, if these sanctions were upheld in their appheation

to obscenity, no principled distinetion would bar the inclu

sion of other unprotected speech (e.g, defamation, false

advertising, ete.) at a predicate offense triggering RICO

or similar prior restraint sanetions,

Coneluding that this application of the RICO statute

did not constitute a prior restraint, the Indiana Supreme

Court also rejected the notion that the pre-trial seizure

and padlocking already imposed in this ease violated nu-

merous procedural! safeguards required by a host of this

Court's prior decisions. However, because the Indiana

Supreme Court's opinion has wow squarely held that the

post-trial forfeiture sanctions are impervious to First

Amendment attack, this case cannot be resolved by ad-

dressing only the pre-trial procedural issues. If left un-

disturbed by this Court, the ruling below will have an im-

mediate and devastating impact, not only in Indiana but

nationwide, curtailing public access to an entire genre of

constitutionally-protected, non-obscene erotic expression.

Accordingly, it is imperative that thle Court consider the

prior restraint aspects of both the pre-trial and post-trial

statutory sanctions.

The Indiana Supreme Court's rejection of the prior

restraint argument was not only inconsistent with the

standard of review mandated by Arcera, supra, and many

other similar cases, it aleo was entirely inconsistent with

this Court's landmark decision in Near o. Minnesota, su-

pra, and numerous subsequent cases invelving obscenity

regulations this Court has found to be impermissible prior

restraints.

In essence, the court approved a statutory scheme

which provides that a state may restram all future ex-

pression by a bookstore or other communicative enter-

prise because of two prior speech-related violations. Neer

held that just such a broad restraint of future expression

premised upon prior speech violations “is of the essence

of censorship.” 283 U.S. at 713.

The opinion below also contravenes numerous post-

Near decisions by this Court striking down overbroad

means of regulating obscenity. These include Mereus rv.

Search Warrants, 367 US. TIT (1961): Quantity of Books

v. Kansas, 378 U.S. 205 (1964); Heller o. New York, 418

U.S. 483 (1973); Readen o. Kentucky, 413 U.S. 496 (1973);

Lee Art Theatre, Inc. v. Virginia, 392 U.S. G36 (1968) ; and

Vance v. Universal Amusement Co, 45 US. 308 (1980).

All of these cases were premised upon the fundamental

belief that measures designed to eliminate obscenity should

not be so sweeping as to restrain the dissemination of

protected speech at the same location; yet this is precisely

what Indiana's civil RICO statute is designed te accom-

phsh.

The court's opinion is alse inconsistent with more

than 40 opinions of state and lower federal courts which

have found state laws authorizing license revocation er

padlocking of prenuses where prior obscenity Violations

have occurred to be impermissible prier restraints. All

of those decisions explicitly or implicitly rejected the no-

tien that such bread restraints ef future presumptively-

protected speech can be constitutionally permissible forms

of punishment for past speech vielations,

For all the reasons above, both the pre-trial and post-

trial sanctions authorized by this statute should be found

facially invalid for overbreadth and as impermissible prior

restraints. Further underscoring the statutory scheme’s

fundamentally flawed nature is the fact that the RICO

statute violates not only the substantive rule of Near and

its progeny, but virtually every procedural safeguard

limiting the regulation of unprotected speech.

This Court’s numerous prior opinions in Marcus v.

Search Warrants, 367 U.S. 717 (1961), A Quantity of

Books v. Kansas, 378 U.S. 205 (1964), Heller v. New York,

413 U.S. 483, 491 (1973), and related cases have squarely

held that any mass pre-trial seizure of the entire contents

of a bookstore violates the First Amendment in the ab-

sence of a prior adversary hearing designed to focus

searchingly on the obscenity of each item sought to be

seized and thereby removed from pub.ic access.

Similarly, the seizure of all copies of even an allegedly

obscene item cannot be based on a mere probable cause —

standard consistent with the public’s right of access to

presumptively-protected material. See Heller v. New York,

supra. The First Amendment rights of publie and book-

seller alike have always been one of the “particularly im-

portant interests” which merit protection by, at the very

least, the “clear and convineing evidence” standard dis-

eussed in California ex rel. Cooper v. Mitchell Brothers,

454 U.S. 90, 93 (1981). Any lesser standard would be in-

consistent with the requirement that persons desiring to

engage in communication presumptively protected by the

First Amendment have sufficient “breathing space” in

order to prevent the chilling effect of self-censorship.

See, e.g., Hustler Magazine v. Falwell, — US. —, 108

S.Ct. 876, 880 (1988); New York Times Co. v. Sullivan,

376 U.S. 254, 272 (1964).

Moreover, there is absolutely no ruarantee under In-

diana law of prompt appellate review of mass seizures

such as these, as constitutionally required under prior de-

cisions of this Court. See, e.g., National Socialist Party

of America v. Village of Skokie, 432 U.S. 43 (1977). The

delay of over one year before the Indiana Court of Appeals

acted on petitioner's promptly filed stay application vivid-

ly demonstrates the need for this constitutional require-

ment.

The complete failure of the eivil RICO statute to

comply with any of these procedural safeguards of First

Amendment rights only serves to dramatize the inappro-

priateness of this statutory scheme as a response to al-

leged obscenity offenses. Hardly an example of the “sen-

sitive tools” which must be employed to separate pro-

tected from unprotected speech (Speiser v. Randall, 357

U.S. 513, 525 (1958)), the RICO statute inevitably effects

a prior restraint upon rast quantities of presumptively-

protected materials as well as the entire on-going opera-

tion of the bookstore, theater, or other communicative bus-

iness.

If upheld by this Court, the RICO Act's draconian

padlocking and forfeiture provisions will also result in

self-censorship of enormous quantities of constitutionally-

protected material by virtue of the statute’s chilling ef-

fect. At the risk of an institutional “death sentence”

merely for two instances of unprotected speech, book-

sellers, video store and theater operators have little choice

but to refrain entirely from disseminating a wide variety

of sexually-oriented materials which in fact are non-ob-

scene, and to which the publie has a constitutional! right

of access. The insidious chilling effect of this statute on

others will be no less damaging to the freedoms of speech

and press than the actual padlock on the door. Both as a

direct prior restraint and for its indirect chilling effect,

therefore, this statute is fatally overbroad in its impact

upon expression fully protected by the First Amendment.

For all these reasons, the statute should be declared

invalid under the First Amendment, and the judgment of

the Indiana Supreme Court should be reversed.

WHERE THE ONLY PREDICATE OFFENSES

ARE OBSCENITY VIOLATIONS, INDIANA'S

CIVIL RICO STATUTE VIOLATES THE FIRST

AMENDMENT ON ITS FACE, BOTH AS A

PRIOR RESTRAINT AND AS AN OVERLY

BROAD STATUTE WHICH RESTRAINS A

SUBSTANTIAL AMOUNT OF CONS “U.

TIONALLY-PROTECTED SPEECH

A. Standard Of Review.

Although the Indiana Court of Appeals found this

statute to be a classic prior restraint in violation of the

First Amendment, the Indiana Supreme Court coneluded

that the legislative purpose was not censorious in inelud-

ing obscenity as a predicate offense in its RICO statute

(Cert. App. 11-12), and that the statute was accordingly

immune from First Amendment serutiny. (Cert. App. 11-

15.) That conclusion is clearly at odds with this Court's

prior decisions. A censorious legislative intent ‘‘is not the

sine qua non of a violation of the First Amendment.”

Minneapolis Star & Tribune Co, v. Minnesota Commis.

sioner of Revenue, 460 U.S, 575, 592 (1983). Accord: Ar-

kansas Writers’ Project, Inc, v. Ragland, — US. — —,

107 S.Ct. 1722, 1727 (1987). “| E}wen regulations aimed

at proper governmental coneerns can restrict unduly the

exercise of rights protected by the First Amendment.’’

Minneapolis Star, supra, 460 U.S. at 592.

Rather, it is the ‘‘operation and effect of the statute’’

which determines the applicable standard of review. Near

». Minnesota, 283 U.S. 697, 708-709 and 713 (1931). Accord

Kingsley Books, Inc. v. Brown, 354 U.S, 436 (1957): ** The

judicial angle of vision in testing the validity of [an ob-

scenity-injunction] statute .. . is ‘the operation and effect

of the statute in substance’... .’’ (Citing Near, supra),

354 U.S. at 441."

The operation and effect of Indiana's civil RICO

statute is dramatically demonstrated by the opinion below.

As construed by the Indiana Supreme Court, the statute

goes into operation simply upon allegations that there

were two or more obscenity violations committed by any

store in a chain of stores under common ownership. Noth-

ing other than these two obseenity violations need be

shown to triewer the entire panoply of draconian sane-

tions.”

The effect of Indiana's civil RICO statute is equally

clear. Based on two prior obscenity violations, the stat-

we “In every case, therefore, where legislative en t of

First Amendment] rights is asserted, the courts should be astute

to examine the effect of the challenged legislation.” (Emphasis

added.) Schneider v. State, 308 U.S. 147, 161 (1939).

as As construed by the Indiana Supreme Court, prior con-

victions are not even necessary. (Cert. App. 16).

ute authorizes the pre-trial padlocking of every store in

a chain of stores under common ownership, thereby totally

restraining every type of speech activity at the affected

locations pending trial. If, for example, a national chain

of bookstores, record stores or video stores had been

found to have sold or rented two or more copies of a video-

tape or a leading men’s magazine believed to be obscene,

the statute, as construed by the Indiana Supreme Court,

would authorize the padlocking of every bookstore, reeord

store or video store in that “‘enterprise’’ as well as the

seizure of the entire inventories and the neutral instra-

mentalities of the businesses pending trial.

If the two or more allegedly obscene materials are

civilly adjudged obscene at trial, (1) the defendant+ must

forfeit all of the seized assets (i.¢., every bookstore, video

store, ete. involved becomes the property of the state) ;“

(2) the defendants are permanently enjoined from engag-

ing in the same type of business enterprise as the one

which was forfeited to the state ;"* (3) the defendants must

divest themselves of any interest in the bookstore, video

store, ete.;"* (4) the enterprise must be dissolved; and

(5) any applicable business licenses and corporate char-

ters are revoked.” In sum, the owner of a bookstore,

newspaper or video store is absolutely restrained, solely

on the basis of past incidents of unprotected speech, by

one of the most virulent regimes of censorship ever adopt-

ed in this nation.”

The virulence of this form of censorship is concrete-

ly demonstrated not only by the seizure of the entire con-

tents of all three Fort Wayne stores for the purpose of

subsequent forfeiture, but also by the devastating order

of forfeiture already imposed under the parallel provi-

sions of the federal RICO statute. In United States v.

Pryba, 674 F Supp. 1504 (E.D.Va. 1987), the first federal

RICO obscenity prosecution, the trial court upheld the

federal RICO statute’s forfeiture provisions agaimst a

motion to dismiss. Following the defendants’ convictions,

the court imposed a draconian order of forfeiture (a

copy of which is appended to this brief as Appendix B

at App. 9-13). Pursuant to this order of forfeiture, the

Government obtained the forfeiture of all assets of the

defendant corporations and video stores, including all me-

dia materials, real estate, bank accounts, machinery, equip-

ment, furniture, and even the defendants’ automobiles.

= IC § 34-4-30.5-2(1).

Clearly, statutes of this type cannot help but have a tre-

mendous repressive impact in restraining presumptively-

protected expression.

The devastating effect of this statute upon protected

expression mandates its strict scrutiny by this Court no

matter what “legislative purpose” the state may offer

in its support. As this Court stated in Schad v. Borough

of Mount Ephraim, 452 U.S. 61, 68 (1981): “the standard

of review is determined by the nature of the right assert-

edly threatened or violated rather than by the power being

exercised or the specific limitation imposed.”

B. As Applied To The Predicate Offense Of Obscenity,

Both The Pre-Trial And Post-Trial Sanctions Of Indiana’s

Civil RICO Statute Are Facially Unconstitutional As Im-

permissible Prior Restraints.

In Near v. Minnesota, 283 U.S. 697 (1931), this Court

held that a publisher which had been found guilty of pub-

lishing nine different scandalous and defamatory editions

of a newspaper and who had also been found to have “reg-

ularly and customarily ’* published scandalous and defama-

tory articles (id. at 706) could not be enjoined from future

publication, as to do so would effect a prior restraint upon

future presumptively protected expression. As this Court

summarized Near in the subsequent case of Kingsley Books

v. Brown, 354 U.S. 486 (1957):

“Minnesota empowered its courts to enjoin the dis-

semination of future issues of a publication because

its past issues had been found offensive. In the lan-

guage of Mr. Chief Justice Hughes, ‘this is of the es-

sence of censorship.’ 283 U.S. at p. 713. As such, it

was unconstitutional.” 354 U.S. at 445.

If the injunction in Near was an unconstitutional prior

restraint, it follows, a fortiori, that the much more ex-

28 Ae ene ee ee

a ee ee eee a eo

tensive restraints authorized by the Indiana civil RICO

Act are impermissible. Simply because two or more past

publications have been found offensive, Indiana has em-

powered its courts to impose a total restraint upon a bus-

iness’ future speech activities and to dismantle that bus-

iness totally, even though its principal activity was the

dissemination of expression. Surely “this is of the es-

sence of censorship.” 283 U.S. at 713.

The Indiana Supreme Court concluded that these stat-

utes escape First Amendment scrutiny because their pur-

pose is “anti-racketeering” and thus content-neutral. How-

ever, Near rejected precisely this argument when it stated

that “{e]haracterizing the publication as a business, and

the business as a nuisance, does not permit an invasion

of the constitutional immunity against restraint.” /d. at

720.

Moreover, both the pre-trial restraints that have al-

ready been imposed in this case, as well as the post-trial

restraints approved by the Indiana Supreme Court, are

far more onerous and restrictive of expression than even

the broad restraint invalidated in Near. The injunction in

Near authorized neither the seizure and forfeiture of the

newspaper’s assets nor the revocation of its license to do

business. The Near injunction did not order the dissolu-

tion of the business, nor did it authorize the padlocking

of the business premises where the offending speech had

been generated. Rather, the Near injunction used civil

processes to bar future expression generally. While the

Indiana statute entails the same essential prior restraint

element condemned in Near,® Indiana’s civil RICO stat-

ute goes far beyond the particular restraint invoked in

Near.

Finally, Near made clear that the number or frequen-

ey of prior speech violations is irrelevant to the immunity

against future restraints :?!

“(I]t does not matter that the newspaper or periodical

is found to be ‘largely’ or ‘chiefly’ devoted to the pub-

lication of such derilictions.” (Emphasis added). 283

U.S. at 720.

In contrast, the Indiana RICO statute permits a vastly

more intrusive prohibition on future presumptively-pro-

tected speech, based upon as few as two acts of distribut-

ing obscene materials.

This Court has repeatedly held that “[aJny system

of prior restraints of expression comes to this Court bear-

ing a heavy presumption against its constitutional valid-

ity.” Heller v. New York, supra, 413 U.S. 483, 491 (1973),

quoting New York Times Co. v. United States, 403 U.S.

20 A defendant convicted under Indiana’s civil RICO statute

for prior speech violations is enjoined “from engaging in the

same type of endeavor as the enterprise in which he was en-

gaged... .” IC § 34-4-30.5-2(2). The effect of such an injunc-

tion where the enterprise is engaged in speech activities is to

prevent a defendant from any prospective speech, whether pro-

tected or not.

ai In addressing the right to engage in unprotected expres-

sion without prior restraint, this Court observed that one “does

not lose his right by exercising it. If [the] right exists, it may be

exercised in publishing nine editions, as in this case, as well as

in one edition.” 283 U.S. at 720. Indeed, as noted supra, there

was a finding of fact that the enjoined business had “regularly

and customarily” published scandalous and defamatory articles.

Id. at 706.

———

eo noe a

ee Se eT ee SL se a ee Oe PY

ad 2 ce ®t

713, 714 (1971), quoting Bantam Books, Inc. v. Sullivan,

372 U.S. 58, 70 (1963). Accord: Organization for a Better

Austin v. Keefe, 402 U.S. 415, 419 (1971); Carroll v. Pres-

ident and Commissioners of Princess Anne, 393 U.S. 175,

181 (1968); Southeastern Promotions, Ltd. v. Conrad,

420 U.S. 546, 558-559 (1975); and Vance v. Universal

Amusement Co., 445 U.S. 308, 316, fn. 13 (1980). In Min-

neapolis Star and Tribune Co. v. Minnesota Commissioner

of Revenue, 460 U.S. 575, 583, fn. 6 (1983), this Court re-

cently reaffirmed that prior restraints “strike to the core

of the Framers’ concerns” and accordingly compel a stan-

dard of serutiny even higher than that applied to most

regulations challenged as violative of the First Amend-

ment.

Kingsley Books, Inc. v. Brown, supra, was one of the

few cases in which this Court upheld any type of prior

restraint upon allegedly obscene material. This Court sus-

tained a New York statute which authorized an injune-

tion, after an adversary hearing, prohibiting the sale or

distribution of specific publications judicially determined

to he obscene. In upholding the statute, the Court sharp-

ly distinguished the situation in Near:

“Unlike Near, [the New York statute] is concerned

solely with obscenity and .. . it studiously withholds

restraint upon matters not already published and not

vet found to be offensive.” 354 U.S. at 445.

The contrast between the restraint in Kingsley Books

and the case at bar could not be more dramatic. Based

upon an adversary judicial determination of obscenity, the

restraint in Kingsley was upheld because it was tailored

to impact only on specific materials that had been pre-

viously adjudicated as unprotected expression. In the pre-

sent case, if a court makes a determination that two or

more prior obscenity violations were committed, it uses

its pre-trial padlocking power and its post-trial forfeiture

and other powers to bar the dissemination of any mate-

rials, whether obscene or protected. Unlike the restraint

in Kingsley, the restraints in this case directly affeet pro-

tected expression.

Subsequent to Kingsley, this Court decided numerous

eases in which it condemned various state procedures for

seizing or restricting alleged obscenity as impermissible

prior restraints upon constitutionally-protected expression.

In Marcus v. Search Warrants, 367 U.S. 717 (1961), this

Court struck down a Missouri civil statutory procedure

for seizure and destruction of obscene materials. Pursuant

to the statute, police officers obtained, ex parte, a search

warrant authorizing them to seize any and all obscene

materials found at the defendant’s premises. Pursuant to

warrant, the officers seized approximately 11,000 copies

of 280 publications. At trial, the court found a majority

of the seized titles to be non-obscene, but ordered all copies

of the obscene titles destroyed. This Court held that the

statutory scheme lacked adequate procedural safeguards

to guarantee the protection of non-obscene sexually-ori-

ented materials and, for that reason, not only invalidated

the seizure of the materials found to be constitutionally-

protected, but also reversed the judgment forfeiting the

materials actually found obscene.

The greatest significance of the Marcus decision, how-

ever, was that, in fashioning the rule that procedural safe-

guards are necessary to separate obscenity from pro-

tected speech, the Court: (1) implicitly coneluded that

the warrant procedure constituted a prior restraint (a

conclusion later rendered explicit in this Court’s summary

of Marcus in Heller v. New York, 413 U.S. 483, at 401

(1973)); and (2) necessarily premised its opinion on the

fundamental concept that protected expression should not

be removed from the public domain simply because, at the

same premises, unprotected expression had also been sold

or exhibited. (Had this not been the Court’s rationale,

there would have been no need for the procedural safe-

guard of a prior adversary hearing to separate obscenity

from protected expression. )

This underlying premise of Marcus was again applied

in Quantity of Copies of Books v. State of Kansas, 378

U.S. 205 (1964), to invalidate a Kansas civil statutory

procedure for seizure and forfeiture of obscene materials.

Pursuant to that statute, police officers had presented

seven books to a magistrate, who examined the materials

ex parte and issued a search warrant directing seizure of

all copies of the seven bocks as well as any other books

of a similar type by the same publisher. Pursuant to the

warrant, the officers seized 1,715 copies of 31 different

titles and, after an adversary hearing was held in which

all the seized items were found obscene, a judgment was

entered for their forfeiture. This Court coneluded that

the Kansas procedures lacked adequate procedural safe-

guards to separate obscenity from constitutionally-pro-

tected expression, and as a result the Court reversed the

judgment of forfeiture, finding the proceeding void ab

initio, regardless of whether the materials were obscene.

As in Marcus, the crucial unstated premises of the

opinion in Quantity of Books were: (1) the warrant pro-

cedure constituted a prior restraint,” and (2) proven vio-

lations, and even numerous proven violations, Of a state’s

obscenity laws cannot justify the removal from circulation

of any materials which might be constitutionally protected.

Not only were Marcus and Quantity of Books decided

based upon a premise fully determinative of the present

case; the prior restraints involved in those cases were far

less severe than those imposed here. In Marcus, only the

items actually believed to be obscene were seized, and the

store was not padlocked. In the present case all items

were seized, and the stores themselves padlocked, simply

because a tiny fraction were alleged to have been obscene.

In Quantity of Books, all copies of 31 different titles

were seized even though only seven titles had previously

been evaluated by the judge. Accordingly, a vast quantity

of presumptively-protected books was seized simply be-

cause other books were believed to be obscene. Thus, the

rationale for seizure in Quantity of Books is very anal-

ogous to the rationale for seizure under the Indiana stat-

ute. However, the restraint imposed in (uantity of Books

Was not neariy as great as the devastating sanctions of

padlocking and forfeiture authorized here.

In Heller v. New York, 413 U.S. 483, 491 (1973), and

again in Lo-Ji Sales, Inc. v. New York, 442 US. o19, 327-

328 (1979), this Court reiterated that the principles of

Marcus and Quantity of Books remain good law: any large-

scale removal of speech materials based on an allegation

22 . . , . .

Again, see this Court's characterization of the holding in

uantit ;

117 wy A Books rendered in Heller v. New York, supra, 413

™ — -

that they are obscene requires a prior adversary hearing.

Heller's reaffirmation of these cases was unquestionably

based on this Court’s concern that alleged obscenity vio-

lations not cause the public to be deprived of access to

other presumptively protected materials. Indeed, so con-

cerned was this Court in Heller about the premature sup-

pression of presumptively protected materials alleged to

be obscene that theater owners were held to be entitled to

make and exhibit a copy of any seized film pending trial.

In Roaden v. Kentucky, supra, 413 U.S. 496 (1973),

and in Lee Art Theatre, Inc. v. Virginia, 392 U.S. 636

(1968), this Court expressly held that the seizure of one

or more motion picture films from a theater by an officer

based upon his personal determination of obscenity is a

form of constitutionally impermissible prior restraint.

413 U.S. at 504. Obviously the pre-trial seizures actually

implemented in the present case, as well as the post-trial

forfeitures authorized by statute, constitute prior re-

straints far more severe than the seizure of one or even

a few films as condemned in Roaden and Lee Art, supra.

In Vance v. Universal Amusement Co., 445 U.S. 308

(1980), this Court struck down a Texas nuisance injune-

tion statute which authorized a court to issue a prelim-

inary injunction of indefinite duration against the exhibi-

tion of any named or unnamed obscene films on a showing

that the enjoined party had, in the past, exhibited any ob-

scene films. The statute had also authorized a one-year

padlocking of any location where one or more obscene

items had been sold or exhibitd.

All 14 judges of the Fifth Circuit sitting en bane

unanimously agreed that the portion of the statute author-

izing a one-year padlocking of the location would be an

unconstitutional prior restraint on the businesses’ ability

to disseminate constitutionally-protected expression. 587

F.2d at 165-166. (However, that Court then gave the

statute what it conceded was a ‘‘strained’’ saving con-

struction so that the one-year closure provision would be

‘‘inapplicable’’ to obscenity. /d. at 166.) A majority of

that court additionally concluded that the injunctive order

against exhibition of any future unnamed obscene ma-

terials would also be an impermissible prior restraint.

The only issue before this Court in Vance was the

constitutionality of the injunction against the future dis-

semination of both named and unnamed obscene materials,

because Texas did not appeal the Fifth Cireuit’s 14-0 rul-

ing striking the padlocking provision. This Court found

the preliminary injunction against specific named films

to be unconstitutional because non-obscenity would not be

a defense to contempt charges.” As to the injunction

against future unnamed obscene materials, this Court

found that the statutory scheme was procedurally deficient

in any event because it authorized prior restraints (pre-

liminary injunctions) of indefinite duration. 445 U.S. at

316-317.

This Court’s opinion in Vance is highly relevant to

the present decision. First, Vance concluded that an in-

junction against unnamed obscene films is in faet a ‘‘prior

restraint . . . more onerous than is permissible under

Freedman v. Maryland|, 380 U.S. 51 (1965)] and South-

eastern Promotions Ltd. v. Conrad, 420 U.S. 546 (1975).’’

23 See 445 U.S. at 316 and see also fn. 4, id., at 312.

445 U.S. at 317. Surely the restraints imposed in the

present case are far more onerous than the one held un-

constitutional in Vance.

Second, Freedman’s underlying rationale, necessary

to the decision in Vance, is that tie state should not inter-

fere with constitutionally-protected expression in its ef-

forts to eliminate the obscene. The various precedural

safeguards required by Freedman, Vance, Marcus and a

long line of this Court’s cases were created to keep non-

obscene expression out of the state’s anti-obscenity net.

If Indiana may completely shut down a bookstore (or

indeed an entire chain of bookstores) simply because it

has found two or more items—later determined to be ob-

scene—-at one store, then it will have succeeded, in one

swift stroke, in gutting the protections for non-obscene

speech this Court has so painstakingly developed through

many decades of its decisions.”

In Arcara v. Cloud Books, Inc., supra, — U.S. —, 106

S.Ct. 3172 (1986), a narrow majority of this Court recently

held that an adult bookstore could be shut down by the

state in order to prevent the recurrence of unlawful con-

duct not involving speech. However, the Court’s opinion

reaffirmed that First Amendment scrutiny would apply

a“ See, e.g., Marcus v. Search Warrant, 367 U.S. 717 (1961);

Quantity of Copies of Books v. Kansas, 378 U.S. 205 (1964) ;

Freedman v. Maryland, 380 U.S. 51 (1965); Tietel Film Corp. v.

Cusack, 390 U.S. 139 (1968); Lee Art Theatre, Inc. v. Virginia,

392 U.S. 636 (1968); Blount v. Rizzi, 400 U.S. 410 (1971); United

States v. Thirty-Seven Photographs, 402 U.S. 363 (1971); Heller

v. New York, 413 U.S. 483 (1973); Roaden v. Kentucky, 413 U.S.

496 (1973); Southeastern Promotions Ltd. v. Conrad, 420 U.S.

546 (1975): and Brockett v. Spokane Arcades, Inc., (Brockett 1),

454 U.S. 1022 (1981).

‘‘where it was conduct with a significant expressive ele-

ment that drew the legal remedy in the first place... .”’

106 S.Ct. at 3177. Moreover, the concurring opinion of

Justices O’Connor and Stevens indicated that a majority

of this Court would find First Amendment scrutiny ap-

plicable where, as here, a closure order was based on prior

obscenity violations:

‘Tf, however, a city were to use a nuisance statute as

a pretext for closing down a bookstore because it sold

indecent books or because of the perceived secondary

effects of having a purveyor of such books in the

neighborhood, the case would clearly implicate First

Amendment concerns and require analysis under the

appropriate First Amendment standard of review.”

Id. at —, 106 S.Ct. at 3178,

Since the present case, unlike Arcara, involves a se-

vere restraint premised solely on the sale of allegedly ob-

scene materials, the Indiana Supreme Court erred in fail-

ing to analyze it under the strict First Amendment stan-

dard of review applicable to prior restraints.

The Indiana Supreme Court’s conclusion is also in-

consistent with that reached by the overwhelming ma-

jority of state appellate courts and lower federal courts

which have considered the very closely analogous question

of the constitutionality of laws which permit the license

revocation or padlocking of a business where prior ob-

scenity offenses have occurred.”

23 The following cases have found nuisance laws unconstitu-

tional which provide for the padlocking of businesses where

obscenity offenses have occurred in the past: Universal Amuse-

ment Co., Inc. v. Vance, 587 F.2d 159, 164-166 (5th Cir. en banc

(Continued on following page)

—

at tai athe th ep laa al se St as Reet tow tense SE ei NEN tls il aN ite RS ac ane

)

(Continued from previous page)

1978) [as to this particular point, all 14 judges of the en banc

court were in agreement], aff'd. on other grounds, 445 U.S. 308

(1980); Pollitt v. Connick, 596 F.Supp. 261, 269-272 (E.D.La.

1984); General Corp. v. Sweeton, 320 So.2d 668 (Ala. 1975),

cert. den. 425 U.S. 904 (1976); People ex rel. Busch v. Projec-

tion Room Theater, 17 Cal.3d 42, 130 Cal.Rptr. 328, 550 P.2d 600

(1976) cert. den. 429 U.S. 922 (1976); Mitchem v. State ex rel.

Schaub, 250 So.2d 883 (Fla.1971); Sanders v. State, 231 Ga. 608,

203 S.E.2d 153 (1974); People v. Sequoia Books, 518 N.E.2d 775

(ILApp. 1988); State ex rel. Blee v. Mohney Enterprises, 289

N.E.2d 519 (Ind.App. 1973); Kansas v. A Motion Picture Entitled

“The Bet”, 219 Kan. 64, 547 P.2d 760 (1976); Giarrusso v.

D’Iberville Gallery, 295 So.2d 891 (La.App. 1974); Gulf States

Theaters af Louisiana v. Richardson, 287 So.2d 480 (La. 1974);

Parish of Jefferson v. Bayou Landing Ltd., Inc., 350 So.2d 158

(La.1977), overruling La.App., 341 So.2d 23; Society to Oppose

Pornography, Inc. v. Thevis, 255 So.2d 876 (La.App. 1972); City

of Minot v. Central Ave. News, Inc., 308 N.W.2d 851 (N.D.

1981); State ex rel. Field v. Hess, 540 P.2d 1165 (Okla. 1975);

Commonwealth ex rel. Davis v. Van Emberg, 347 A.2d 712 (Penn.

1975); and New Rivieria Arts Theatre v. Davis, 219 Tenn. 652, 412

S.W.2d 890 (1967). See also J-R Distributors, Inc. v. Eikenberry,

725 F.2d 482, 494-495 (9th Cir. 1984), rev’d. on other grounds

sub nom. Brockett v. Spokane Arcades, Inc., 472 U.S. 491 (1985);

Nihiser v. Sendak, 405 F.Supp. 482, 491-492 (N.D.ind. 1974),

vacated and remanded on other grounds, 423 U.S. 976 (1975),

order re-entered August 16, 1976 (unpub.), aff'd. 431 U.S. 961

(1977); Huffman v. Pursue, Ltd, 420 U.S. 592, 612, n. 23 (1975);

cf. Speight v. Slaton, 415 U.S. 333 (1974); State ex re/. Ewing v.

“Without a Stitch”, 307 N.E.2d 911 (Ohio 1974).

The following cases have held unconstitutional laws which

allow a permit!to be either revoked or denied upon a prior

obscenity violation: City of Paducah v. Investment Entertain-

ment, 791 F.2d 463 (6th Cir. 1986); Entertainment Concepts Inc.

Ill v. Maciejewski, 631 F.2d 497, 506 (7th Cir. 1980); Genusa v.

City of Peoria, 475 F.Supp. 1199, 1207-09 (C.D.IIl. 1979), aff'd.

619 F.2d 1203, 1217-1220 (7th Cir. 1980); Gayety Theaters, Inc.

v. City of Miami, 719 F.2d 1550 (11th Cir. 1983); Bayside

Enterprises, Inc. v. Carson, 470 F.Supp. 1140 (M.D.Fla. 1979);

San Juan Liquors v. Consol. City of Jacksonville, 480 F.Supp. 151

(M.D.Fla. 1979); Yuclan Enterprises Inc. v. Arre, 488 F.Supp. 820

(D.Hawaii 1980); Avon 42nd Street Corp. v. Myerson, 352 F.Supp.

994 (S.D.N.Y. 1972); Natco Theatres Inc. v. Ratner, 463 F.Supp.

1124 (S.D.N.Y. 1979); Oregon Bookmark Corp v. Schrunk, 321

(Continued on following page)

The common thread of all these cases is their con-

clusion that the First Amendment doctrine of prior re-

straints prohibits the government from restraining future

expression on the basis of prior speech violations. All of

these decisions explicitly or implicitly reject the notion

that padlocking or license revocation is simply a subse-

quent punishment and thereby need not be subjected to

First Amendment scrutiny as a prior restraint.

Perhaps one of the clearest ways to illustrate the per-

nicious evil of this statute is to observe that if the state

can make obscenity a predicate RICO offense, there is no

constitutional obstacle to making libel or false advertising

predicate RICO offenses as well. As a result, under the

state’s theory of constitutional law, there would be no

impediment to padlocking and forfeiting the New York

Times Company, the Washington Post or the National

Broadcasting Co. simply because the state proved that two

libels or deceptive ads were published.

(Continued from previous page)

F.Supp. 639 (D.Oregon 1970); Cornflower Entertainment, Inc.

v. Salt Lake City Corp., 485 F.Supp. 777 (D.Utah 1980); Perrine

v. Municipal Court, 5 Cal.3d 656, 97 Cal.Rptr. 320, 488 P.2d 648

(1971), cert. den. 404 U.S. 1038 (1972); Kuhns v. Santa Cruz Co.

Bd. of Sup’rs., 128 Cal.App3d 369, 374-375, 181 Cal.Rptr. 1,

3-4 (1982); City of Delevan v. Thomas, 31 IIlLApp.3d 630, 334

N.£.2d 190 (1975); Alexander v. City of St. Paul, 303 Minn. 201,

227 N.W.2d 370 (Minn. 1975); Hamar Theatres Inc. v. City of

Newark, 150 N.J.Super. 14, 374 A.2d 502 (1977); People v. J.W.

Productions, 413 N.Y.S.2d 552 (N.Y.C.Cr.Ct. 1979); City of Seattle

v. Bittner, 81 Wash.2d 747, 505 P.2d 126 (1973); see also Intern.

Soc. for Krishna Consciousness v. Eaves, 601 F.2d 809, 832-833

(5th Cir. 1979); Fernandes v. Limmer, 663 F.2d 619, 629-630, 632

(5th Cir. 1981); cf. Chulchian v. City of Indianapolis, 477 F.Supp.

128, 131-132 (S.D.Ind. 1979), aff’d., 633 F.2d 27, 30 (7th Cir.

ben Marks v. City of Newport, Ky., 344 F.Supp. 675 (E.D.Ky.

Similarly, under the existing statute, if a nationwide

bookstore chain such as Waldenbooks or B. Dalton’s had

sold two or more copies of a single issue of Penthouse

Magazine which subsequently was found obscene, the en-

tire inventories and assets of Waldenbooks or B. Dalton’s

could be forfeited to the state and every store in that

‘‘enterprise’’ could be padlocked, thereby prohibiting

them from even selling the Bible. Obviously, the theory

upon which the state is proceeding herein is inconsistent

with basic First Amendment protections.

C. The Indiana Statutory Scheme Must Also Fall When

Analyzed As An Overly Broad Law Which Restricts Sub-

stantial Amounts Of Constitutionally-Protected Expression.

Indiana’s civil RICO statute must also fall as legisla-

tion which broadly stifles protected expression even

though arguably aimed at legitimate state goals.

In N.A.A.C.P. v. Alabama, 377 U.S. 288 (1964), this

Court definitively ruled that the punishment for unlawful

association and expression could rot include an undue re-

striction on the prospective exercise of fundamental con-

stitutional rights. In that case, the state of Alabama ob-

tained an injunction against the N.A.A.C.P. to prevent it

from condueting any business in the state of Alabama. The

state sought the injunction in part because the N.A.A.C.P.

was carrying on ‘‘its activities in Alabama without com-

plying with state laws requiring foreign corporations to

was upheld by the Alabama Supreme Court, this Court

held that “past failure to register could not constitution-

ally be made the basis for permanently preventing the

Association from registering and thereby denying its mem-

bers the right to associate in Alabama.’’ 377 U.S. at 306,

fn. 12 (emphasis in original).

In response to the state’s additional argument that the

N.A.A.C.P. violated Alabama law by organizing consumer

boycotts, this Court then held that even assuming the un-

derlying state laws were valid proscriptions of the organi-

zation’s conduct, the sanctions imposed for their violation

were nonetheless unconstitutional :

‘This Court has repeatedly held that a governmental

purpose to control or prevent activities constitution-

ally subject to state regulation may not be achieved by

means which sweep unnecessarily broadly and thereby

invade the area of protected freedoms. ‘* * * | T }he

power to regulate must be so exercised as not, in

attaining a permissible end, unduly to infringe the

protected freedom.’ Cantwell v. Connecticut, 310 U.S.

296, 304. ** * * [E]ven though the governmental pur-

pose be legitimate and substantial, that purpose can-

not be pursued by means that broadly stifle funda-

mental personal liberties when the end can be more

narrowly achieved.’ Shelton v. Tucker, 364 U.S. 479,

488 (footnote omitted).’”’ (Citation omitted)

N.A.AC.P. v. Alabama, supra, 377 U.S. at 307-308.%

Applying the foregoing mode of analysis, it is quite

clear that the inclusion of obseenity as a predicate RICO

offense subjects those whose only offense is two obscenity

violations to the most repressive prospective restraints on

expression imaginable. The state can not only seize and

a To the same effect, see the numerous cases cited in sup-

port of this proposition at 377 U.S. at 308, and in Aptheker v.

Secretary of State, 378 U.S. 500, 507-508 (1964). Cf. New York

v. Ferber, 458 U.S. 747, 773 (1982) [the penalty to be imposed

is relevant in determining whether demonstrable overbreadth

is substantial.”’]

’

{

forfeit the entire inventory of every bookstore, newsstand,

video-store, theater, motion picture studio or newspaper in

a chain of such businesses, but can also: (1) seize all neu-

tral instrumentalities necessary to engage in future pre-

sumptively protected expression (e.g., motion picture pro-

jectors, printing presses, ete.) ; (2) padlock all such busi-

nesses; (3) revoke all applicable business licenses and

corporate charters; and (4) enjoin all members of the

‘‘enterprise’’ from ever again engaging in the type of

business which the enterprise operated. Moreover, as

construed and applied by the respondent Indiana authori-

ties, the statute authorizes the forfeiture of the real prop-

erty of any landlord who rents his store or building to an

‘‘enterprise’’ which subsequently produces, distributes,

sells, rents or exhibits two or more obscene items.2”?” A

more pervasive restraint on protected expression could

hardly be imagined.

Where, as here, a statutory scheme imposes a substan-

tial restriction on constitutionally-protected expression, a

strict standard of scrutiny is required to determine wheth-

er the purposes underlying such a law could possibly neces-

sitate so severe a restraint. Schad v. Burough of Mount

Ephraim, 452 U.S. 61 (1981).

In Schad, this Court applied a strict standard of

scrutiny in striking down a zoning ordinance that pro-

hibited all live entertainment (see fn. 7, 452 U.S. at 68 and

accompanying text), and concluded that ‘‘|t}he Borough

has not established that its interests could not be met by

27 See Amicus Brief of Burke Mendenhall filed herein in

support of Petition for Writ of Certiorari.

restrictions that are less intrusive on protected forms of

expression.’’ Jd. at 74.

Similarly, Indiana cannot justify its inclusion of ob-

scenity violations as conclusive evidence of racketeering

activity, subjecting the violator to the panoply of repres-

sive RICO sanctions. If punishment is the purpose of in-

eluding obscenity as a RICO trigger, then the statute is

broader than necessary because existing criminal obscenity

statutes in Indiana were created precisely for the purpose

of punishing such violations.

If the purpose is not punishment, but the dismantling

of the business in order to prevent the possibility of any

future violations, then such purpose not only constitutes

the essence of prior restraint but is also clearly overbroad

where, as here, the only predicate acts consist of allegedly

illegal speech activities.% See Arcara v. Cloud Books, Inc.,

supra, 106 S.Ct. at 3178 (concurring opinion of Justices

O’Connor and Stevens). As Near v. Minnesota, supra,

clearly held, the intentional restriction cf all future ex-

28 State and federal governments have limited discretion in

establishing punishments for obscenity violations, as contrasted

to other crimes. As stated in Smith v. California, supra:

“The existence of the State’s power to prevent the dis-

tribution of obscene matter does not mean that there

can be no constitutional barrier to any form of prac-

tical exercise of that power.” 361 U.S. at 155.

Smith recognized that “[t}he ordinance here in question,

to be sure, only imposes criminal sanctions on a bookseller it

in fact there is to be found in his shop an obscene book” (id.

at 152), but went on to point out that the state has no “power

to restrict the dissemination of books which are not obscene.”

(Id.) See also Roth v. United States, 354 U.S. 476, at 488 (1957)

and Miller v. California, 413 U.S. 15, 23-24 (1973).

ae ee

ee ee ee ee eae

ee ee ees

pression solely because of past unlawful expression ‘‘is of

the essence of censorship.’’ 283 U.S. at 713.

For all the foregoing reasons, both the pre-trial and

post-trial sanctions of Indiana’s civil RICO statute are

facially unconstitutional as applied to those whose only

predicate offenses are obscenity violations.

D. This Court Has Jurisdiction To Consider The Facial

Validity Of Both The Pre-Trial And Post-Trial Sanctions

Authorized By Indiana’s Civil RICO Statute.

This Court has jurisdiction to review the facial valid-

ity of both the pre-trial and post-trial sanctions at issue

in this case consistent with 28 U.S.C. § 1257’s jurisdictional

limitation that this Court only review ‘‘final’’ judgments

from the state courts.

The Indiana Supreme Court’s ruling has finally de-

termined that the civil RICO Act’s pre-trial restraints on

First Amendment expression imposed in this case are con-

stitutional and shall remain in effect pending trial. That

determination is sufficiently final to invoke this Court’s

jurisdiction under 28 U.S.C. § 1257. National Socialist

Party of America v. Village of Skokie, 432 U.S. 48 (1977);

M.1.C. Ltd. v. Bedford Township, 463 U.S. 1341 (1983)

(per Justice Brennan as Circuit Justice) ; Cf. Renaissance

Arcade and Bookstore v. County of Cook, — U.S. —, 106

S.Ct. 9 (1985) (per Justice Stevens as Circuit Justice).

As the pre-trial sanctions included an order that peti-

tioner’s business be padlocked pending trial, the prior

restraint issue is necessarily presented in_petitioner’s

challenge to the pre-trial, as well as post-trial, sanctions.

The Indiana Supreme Court also finally determined

that the post-trial sanctions under Indiana’s civil RICO

statute are immune from First Amendment scrutiny where

the only predicate offenses are obscenity violations. In-

deed, by upholding the pre-trial seizures which are statu-

torily authorized only for the purpose of preserving assets

for post-trial forfeiture, and by expressly concluding that

the post-trial forfeiture remedy would not pose an uncon-

stitutional prior restraint, the Indiana Supreme Court

gave a concrete, non-speculative interpretation of the per-

missible scope of the statute’s post-trial forfeiture rem-

edies. This Court’s prior decisions establish beyond doubt

that such a determination is of sufficient finality to invoke

this Court’s jurisdiction.

Where, as here, a federal issue has been finally decided

by the highest state court and further trial proceedings are

pending in which the party seeking review might prevail

on non-federal grounds, thereby precluding review of the

federal issue by this Court, this Court has deemed such

rulings to be ‘‘final,’’ particularly where, as here, ‘‘a re-

fusal immediately to review the state court decision might

seriously erode federal policy.’’ Cox Broadcasting Corp.

v. Cohn, 420 U.S. 469, 482-483 (1975).% Accord Hudson

Distributors v. Eli Lilly, 337 U.S. 386 (1964) [finding fi-

nality under these circumstances where federal policy

recognized preemptive effect of federal antitrust laws

over parallel state regulations], and Miami Herald Pub-

lishing Co. v. Tornillo, 418 U.S. 241, 247, fn. 6 (1974) [find-

ing finality under these cireumstances where federal policy

is to vindicate First Amendment rights].

This Court’s rationale for finding jurisdiction in

Miami Herald, supra, is particularly pertinent here:

2 A thorough summary of these types of “finality” cases is

presented in Cox, 420 U.S. at 482-485.

we a, Mle ~

‘‘Whichever way we were to decide on the-merits, it

would be intolerable to leave unanswered, under these

circumstances, an important question of freedom of

the press under the First Amendment; an uneasy and

unsettled constitutional posture of {the statute] could

only further harm the operation of a free press. Mills

v. Alabama, 384 U.S. 214, 221-222 (1966) (Douglas, J.,

concurring).’’ 418 U.S. at 247, fn. 6.

In the present case, it would be equally intolerable to

leave unanswered the question whether the forfeiture

and license revocation remedies of a civil RICO statute

can be applied to those whose only offense involves speech-

rela‘ed conduct. As discussed further below, the chilling

effect which such an unsettled status would create would

have an intolerable impact on federal constitutional rights

throughout both Indiana and the nation.

It is also relevant that Chief Justice Burger’s majority

opinion in Miami Herald cited with approval the concur-

ring opinion of Justice Douglas in Mills v. Alabama, 384

U.S. 214, 221-222 (1966), which pointed out that ‘‘even

had appellant been unwilling to concede that he has no

defense—apart from the constitutional question—to the

charges against him, we would [nonetheless] be warranted

in reviewing this case” on grounds that “where First

Amendment rights are jeopardized by a state prosecution

which, by its very nature, threatens to deter others from

exercising their First Amendment rights, a federal court

will take the extraordinary step of enjoining the state

prosecution.” Id.

Accordingly, this Court has jurisdiction to review the

constitutionality of the civil RICO statutory scheme in its

entirety, and, petitioner respectfully submits, should do so.

| The constitutional invalidity of this statutory scheme

is further underscored by the fact that it is completely

devoid of the procedural safeguards required under the

First Amendment in any proceeding to sanction unpro-

tected speech. Even as applied to materials actually al-

leged and shown to be obscene, the civil RICO Act euther-

izes proceedings which are void ab initio because they vio-

late virtually every procedural rule this Court has doomed

essential to ensure ‘‘the necessary sensitivity to freedom

of expression.”’ Freedman v. Maryland, 380 U.S. 51, 58

(1965).

As this Court emphasized in Spetser v. Randall, 357

U.S. 513, 525 (1958), “‘the line between speech uncondi-

tionally guaranteed and speech which may legitimately be

regulated, suppressed, or punished is finally drawn 7 2%

The separation of legitimate from illegitimate speech calls

for ... sensitive tools.”’ Accordingly, the Court later

stressed, ‘‘a State is not free to adopt whatever procedures

it pleases for dealing with obscenity ... without regard to

the possible consequences for protected speech.”’ Marcus

v. Search Warrants, 367 U.S. 717, 731 (1961). Obviously,

the procedures authorized by the Indiana civil RICO stat-

ute as applied to obscenity entail disastrous consequences

for protected speech.

First, the statute on its face and as applied in this

case authorizes the pre-trial seizure of the entire communi-

eative ‘‘enterprise’’ pursuant to an ex parte hearing with-

out notice to the defendants. Even if the entire contents

of the bookstore were alleged to be obscene (as of course

they are not here), this Court has unequivocally held that

an adversary hearing must be afforded prior to any such

mass seizure of allegedly unprotected materials. In Marcus

v. Search Warrants, supra, and Quantity of Copies of

Books v. Kansas, 378 U.S. 205 (1964), as detailed above,

this Court held void ab initio proceedings which involved

the mass seizure of communicative materials in the ab-

sence of a prior adversary hearing ‘‘designed to focus

searchingly upon the question of obscenity.’’ Marcus,

supra, 367 U.S. at 732.

If an ex parte injunction, which ‘‘represents the most

devastating of restraints on constitutionally protected ac-

tivities’’ (Walker v. City of Birmingham, 388 U.S. 307,

346 (1967)), cannot be imposed even upon allegedly ob-

scene materials, a fortiort it cannot be imposed upon pre-

sumptively protected expression as to which the statute

renders any allegation of obscenity irrelevant. Any such

seizure upon allegations that o/her material is unprotected

constitutes a blatant and impermissible prior restraint.

As vividly highlighted by the facts of this case, these

pre-trial seizure and padlocking measures authorized by

the RICO statute also create a restraint of indefinite dur-

ation of the sort this Court condemned in Freedman v.

Maryland, 380 U.S. 51 (1965), and more recently in Vance

v. Universal Amusement Co., Inc., 445 U.S. 308 (1980). In

Freedman, one of the basic First Amendment procedural

requirements tais Covrt deemed necessary even for the

restraint of allegedly obscene materials was a final adjudi-

cation within ‘‘the shortest fixed period compatible with

sound judicial resolution.’’ 380 U.S. at 59. In Vance, this

Court struck down a statute authorizing interim injune-

tions of indefinite duration against named or unnamed

obscene films, upon a preliminary finding of one or more

obscene exhibitions in the past.*°

The Indiana statute clearly transgresses this First

Amendment procedural mandate, entailing no requirement

of a final judicial determination within any specified

period. The Indiana Supreme Court held only that trial

was required within a ‘‘reasonable’’ time, hardly an ade-

quate guarantee even for allegedly unprotected speech.

Similarly, the Indiana RICO scheme fails to afford

prompt or immediate appellate review of interim or final

restramts upon expression, as required in National So-

cialist Party of America v. Village of Skokie, 432 U.S. 43

1977). The gravity of this procedural failing is drama-

tized by the facts of this case, in which petitioner filed an

application for a stay in the state Court of Appeals within

days of the trial court’s denial of its motion to vacate the

ex parte seizure order. Despite continuous efforts to ob-

tain prompt appellate review, the three Fort Wayne book-

stores remained padlocked for more than a year before the

Court of Appeals granted the stay.

The statutory scheme also violates First Amendment

requirements in establishing and apportioning the burden

” See also United States v. Thirty-Seven Photographs, 402

U.S. 363, 371-72 (1971), condernning “delays as long as 40 days

and even six months between seizure of obscene goods and com-

mencement of judicial proceedings,” and requiring final adjudi-

cation within 60 days.

ee ee a

of proof. In Speiser v. Randall, supra, 357 U.S. 518

(1958), this Court held that the burden of proof and the

burden of going forward are of critical importance where

ihe issue is entitlement to constitutional protection under

the First Amendment. (This general principle was sub-

sequently applied specifically. in Freedman v. Mary-

land, supra, in the context of administrative censorship

schemes.) As construed by the Indiana Supreme Court,

however, the burden of proof and the burden of going for-

ward is put entirely upon the defendant where the State

obtains an ex parte order of seizure and closure. ‘‘Gen-

erally, a defendant would initiate {a challenge to] such

action by the filing of a motion to vacate the seizure or-

der.’’ (Cert. App. 19.) The Court went on to note that

if the defendant did not file a motion to vacate, then the

only other remedy would be at a subsequent trial on the

merits.

Additionally, the ex parte seizure and closure order

issues upon a mere probable cause showing, and the final

forfeiture proceeding is conducted merely upon a civil

preponderance standard of proof. However, this Court

intimated in California ex rel. Cooper v. Mitchell Bros.,

54 U.S. 90 (1981), that because of the importance of First

Amendment interests, at least a ‘‘clear and convincing’’

standard is required in cases of this nature.*'

Procedurally, the Indiana statute even in its opera-

tion to suppress alleged obscenity perfectly illustrates the

dangers of ‘ta scheme of governmental censorship devoid

3 The California courts applied this standard upon remand

of the underlying civil action to enjoin the exhibition of al-

legedly obscene films, People ex rel. Cooper v. Mitchell Broth-

ers, 128 Cal.App.3d 937, 180 Cal.Rptr. 728 (1982).

of the constitutionally required safeguards,’’ Bantam

Books v. Sullivan, 372 U.S. 58, 64 (1963). As the Indiana

Court of Appeals characterized the statute:

‘Devoid of procedural strictures including the stan-

dard of proof of a criminal prosecution, these civil

remedies .. . may indeed curb the availability of ob-

scenity but [cut] a broad swath into the realm of pro-

tected expression as well.’’ 479 N.E.2d at 592.

The Court of Appeals concluded, therefore,

‘that the seizure orders against these defendants and

the statutes’ application to obscenity generally must

be characterized as both substantively and procedur-

ally unconstitutional . . .: as prior restraints of pro-

tected speech, or as impermissible procedures for re-

straining speech which may or may not be protected.’’

Id. at 598.*?

Petitioner does not contend that a statutory scheme

so fundamentally flawed under the First Amendment could

be salvaged merely by proper ‘adherence to constitution-

ally-required procedures. Rather, this recitation of pro-

cedural deficiencies is merely to underscore the complete

inappropriateness of the RICO statute’s remedies as a

means of regulating obscenity, representing as they do

the most ‘‘insensitive tools’’ yet devised for that purpose.

The Georgia Supreme Court in Sanders v. State, 231

Ga. 608, 613-614, 203 S.E.2d 153, 157 (1974), struck down

a closely analogous obscenity nuisance statute which au-

thorized the permanent closure of a bookstore for one

prior obscenity violation, the broad sweep of such a rem-

32 See the Court of Appeals’ entire discussion of the stat-

ute’s procedural inadequacies at Cert. App. 58-70.

> ae

edy “thereby precluding the application of ... procedural

safeguards and creating an unconstitutional restraint”’

upon presumptively-protected communication. (Emphasis

added.) Aptly summarizing the constitutional flaws at

issue here, the Georgia Court concluded that an overbroad

statute of this type:

‘‘ereates a chilling effect upon the exercise of free

expression. We cannot throw out the protected to rid

ourselves of the unprotected as these laws would re-

quire ... We must use the deft, the precise and the

remedial incision of the surgeon rather than the

bludgeoning blow of the butcher to cut away cancer-

our obscenity. If we do not, the body politic will suf-

fer too mortal a blow from our zeal to have a decent

society free of obscene publications but otherwise full

of poetry and prose.’’

III

AS APPLIED TO THE PREDICATE OFFENSE

OF OBSCENITY, THE RICO STATUTE’S SEI-

ZURE, FORFEITURE, AND OTHER CIVIL

REMEDIES CREATE AN UNPRECEDENTED

AND CONSTITUTIONALLY IMPERMISSIBLE

CHILLING EFFECT UPON A VAST RANGE

OF PROTECTED EXPRESSION.

The pernicious effects of this draconian statute ex-

tend far beyond its direct operation upon communicative

businesses which may be targeted for seizure and for-

feiture. The very existence of the civil RLCO statute with

its extraordinarily severe penalties creates a chilling effect

which would suppress indirectly what cannot be directly

censored: a vast array of constitutionally-protected, non-

obscene expression. The threat of pre-trial seizure and

post-trial forfeiture of entire bookstores, theaters, video

stores, or even chains of related communicative businesses,

merely for twice having disseminated materials subse-

quently deemed unprotected, creates an unprecedented im

terrorem effect which can only result in pervasive self-

censorship of protected materials. From this perspective

as well, the Indiana RICO statute facially violates the

First Amendment requirement that any such regulation be

‘*narrowly tailored”’ to avoid the suppression of protected

along with unprotected speech.

This Court has continually recognized that because

First Amendment freedoms ‘‘are delicate and vulnerable,

as well as supremely precious in our societ,’’ they ‘‘need

breathing space to survive.’’ N.A.A.C.P. v. Button, 371

U.S. 415, 483 (1963). The very ‘‘threat of sanctions may

deter their exercise almost as potently as the actual appli-

cation of sanctions,’ /d., creating ‘‘a continuous and per-

vasive restraint on all freedom of discussion that might

reasonably be regarded as within [their] purview.”’

Thornhill +. Alabama, 310 U.S. 88, 98 (1940). See also

Hustler Magazine v. Falwell, — U.S. —, 108 S.Ct. 876,

880 (1988).

Integral to this Court’s holding in Roth v. United

States, 354 U.S. 476 (1957), that obscenity could be reg-

ulated as unprotected speech, was the stipulation that

such regulation must not infringe upon the untrammeled

circulation of protected materials.

“TS]ex and obscenity are not synonymous .... The

portrayal of sex ... is not itself sufficient reason to

deny material the constitutional protection of free-

dom of speech and press. Sex, a great and mysterious

motive force in human life, has indisputably been a

subject of absorbing interest to mankind through the

ee eee

ages; it is one of the vital problems of human inter-

est and public concern.” 354 U.S. at 487.

Because protected expression must not get caught up in

the nets designed to snare obscenity, the power to reg-

ulate in this area must be strictly limited: “The door bar-

ring federal and state intrusion into this area cannot be

leit ajar; it must be kept tightly closed and opened onlv

the slightest crack necessary.” Id. at 488.

The Indiana civil RICO statute, if sustained, would rip

that door from its hinges, by imposing an institutional!

death sentence upon any communicative business civilly

adjudged to have twice disseminated obscene material.

These dramatically enhanced penalties for obscenity of-

fenses, combined with the inherent vagueness of the ob-

scenity definition and the closely related problem of sci-

enter, can only serve to create an unprecedented regime

of self-censorship. By making the dissemination of any

sexually-explicit materials an ultrahazardous endeavor,

these RICO statutes by their operation and by intent cast

a chilling pall guaranteed to compel First Amendment bus-

inesses to “steer far wider of the unlawful zone,” a result

this Court long ago condemned in Speiser v. Randall, 357

U.S. 513, 526 (1958).

Although this Court has struggled mightily to for-

mulate an adequate definition of obscenity, the vagueness

problem inherent in any such attempt persists. Whether

or not one concludes that the vagueness of the Miller det-

inition reaches a constitutionaliy intolerable level, the fact

remains that the defendant charged with an obscenity of-

fense almost never has advance knowledge that the ma-

terial is obscene and therefore illegal. Unlike defendants

who have committed any of the other predicate RICO of-

fenses, e.g. murder, robbery, or drug-trafficking, defen-

dants alleged to have disseminated obscene materials may

have done so fully and reasonably believing in the legality

of their conduct.

Clearly, it is diffieult if not impossible to predict

what materials will be targeted for obscenity prosecu-

tion and subsequently adjudged to be obseene. Literary

classics and major motion pictures have been subjected to

obscenity prosecution; “Carnal Knowledge” was deemed

obscene at trial by the Georgia Supreme Court until this

Court reversed in Jenkins v. Georgia, 418 U.S. 153 (1974).

Issues of Penthouse, available at most newsstands and

convenience stores, have been declared obscene, see Pent-

house International, Ltd. v. McAuliffe, 610 F.2d 1353

(1980), and similar household-name magazines such as

Playboy are frequently threatenca with obscenity prose-

eution. See, e.g., Council for Periodical Distributors

Ass’n v. Evans, 642 F.Supp. 552 (M.D.Ala. 1986). Compare

State v. Walden Book Co., 386 So.2d 342 (La. 1980), find-

ing Penthouse to be constitutionally protected.

Even in formulating the current obscenity standard

in Miller v. California, 413 U.S. 15, 23 (1973), this Court

recognized that the regulation of obscenity “is an area in

which there are few eternal verities.” Nevertheless, the

Miller majority sought to eliminate the problem of “fair

notice’’ by reducing to a tolerable level the inherent sub-

jectivity in the identification of obscenity. The Court

formulated what it considered to be a “bright line” dis-

tinction between protected and unprotected erotic expres-

sion: “Under the holdings announced today, no one will

be subject to prosecution for the sale or exposure of ob-

scene materials unless these materials depict or describe

patently offensive ‘hard core’ sexual conduct.” 413 U.S.

at 27. In the intervening 15 years, changing social condi-

tions and technology have greatly eroded any “fair no-

tice” of illegality provided by anti-obscenity statutes, par-

ticularly as mass popular viewing of X-rated videotapes

has made “community standards” a more elusive concept

than ever. With the advent of the “video revolution,”

X-rated videotapes of the type formely regarded as “hard-

core” have become standard viewing fare in American

homes. Rentals of such videotapes, estimated to exceed

100 million units in 1986, are predicted to continue

to increase dramatically.’ Most recently, Newsweek

(february 1, 1988 at p. 44) reports the estimate that

“more than 20 million Americans now watch at least one

blue video each week.”

Community standards, which have always been sub-

ject to criticism as ‘‘vague and unascertainable,’’ such that

the question of obscenity ‘‘is determined primarily by

individual jurors’ subjective reactions to the materials .. .

rather than by the predictable application of rules of law,’’

Smith v. United States, 341 U.S. 281, 314-316 (1977) (Jus-

tice Stevens, dissenting) have become even less ascertain-

able as a result of these developments. The statistics re-

garding the popularity of adult, sexually-explicit films

indicate a dramatic shift in community standards, toward

widespread acceptance of graphie depictions of sexuality.

The result has been the complete erosion of what the Miller

Court believed at the time to be a ‘‘bright-line’’ standard—

a category of ‘‘hardcore’’ materials which producers and

38 See Petition for Writ of Certiorari, pp. 24-27.

distributors were given ‘‘fair notice’’ to eschew, but many

of which now represent protected expression.“

Given this situation in which the Miller guidelines

have become increasingly amorphous, obscenity statutes

not only fail to give ‘‘fair notice’’ to communicative busi-

nesses, they equally fail “‘to establish minimal guidelines

to govern law enforcement,’’’ another variety of vague-

ness this Court recently condemned in Kolender v. Lawson,

461 U.S. 352, 358 (1983), quoting Smith v. Goquen, 415

U.S. 566, 574 (1974). As a result, obscenity statutes have

increasingly come to ‘‘permit ‘a standardless sweep [that |

allows policemen, prosecutors, and juries to pursue their

personal predilections.’ ’’ 461 U.S. at 358, quoting 415

U.S. at 575. Their enforcement has become, predictably,

ever more ‘‘arbitrary and erratic.’’ Paris Adult Theatre 1

v. Slaton, 413 U.S. 49, 88 (1973) (Brennan, dissenting).

Just as vagueness continues to present constitutional

difficulties in the regulation of obscenity, the closely-re-

ad These changes in community standards have only exacer-

bated the vagueness problems noted by Justice Brennan, dis-

senting in Paris Adult Theatre | v. Slaton, 413 U.S. 49, 84 (1973):

“Any effort to draw a constitutionally acceptable boun-

dary . . . must resort to such indefinite concepts as

‘prurient interest,’ ‘patent offensiveness,’ ‘serious lit-

erary value,’ and the like. The meaning of these con-

cepts necessarily varies with the experience, outlook,

and even idiosyncracies of the person defining them.

Although we have assumed that obscenity does exist

..., We are manifestly unable to describe it in ad-

vance, except by reference to concepts so elusive that

they fail to distinguish clearly between protected and

unprotected speech.”

As Justice Scalia, concurring in Pope v. Illinois, — U.S. —, 107

S.Ct. 1918, 1923 (1987), has similarly observed, “it is quite im-

possible to come to an objective assessment of (at least) literary

or artistic value.”

lated issue of scienter also factors into the caleulus of

chilling effect. As this Court noted in Mishkin v. New

York, 383 U.S. 502, 511 (1966), “the Constitution requires

proof of scienter to avoid the hazard of self-censorship of

constitutionally protected material and to compensate for

the ambiguities inherent in the definition of obseenity.’’

Subsequently, the element of scienter constitutionally re-

quired for conviction of obscenity offenses has been de-

fined as ‘‘knowledge of the contents|,| character and na-

ture of the materials.’’ Hamling v. United States, 418 U.S.

87, 123 (1974). This scienter requirement has been reduced

to the vanishing point in practical application, however:

see Sherwin v. United States, 572 F.2d 196, cert. denied 437

U.S. 909 (1978), (conviction of obscenity on mere knowl-

edge of material’s ‘‘sexual orientation’’); Sewell v. Geor-

gia, 238 Ga, 495, 233 S.E.2d 187, appeal dismissed, 435

U.S. 982 (1978) (‘‘constructive knowledge’’ of material’s

contents sufficient scienter for obscenity conviction). Par-

ticularly in the case of the general distributor who desires

to market a wide range of materials including the extra-

ordinarily popular X-rated videos, for example, this very

low threshold of scienter only exacerbates the ‘‘inherent

ambiguities’’ of the obscenity definition and increases the

peril of anyone disseminating erotic materials. Unable

to make a safe judgment that much popular erotic material

would be immune from prosecution, the distributor or

video store operator has little choice but to engage in self-

censorship of precisely the sort this Court wisely sought

to preelude in Smith v. California, 361 U.S, 147 (1959).

Even assuming these vagveness and scienter problems

do not create an unconstitutional chilling effect in the con-

text of garden-variety obscenity prosecutions, the addi-

tional factor of limitless confiseatory penalties in the form

of civil RICO liability certainly exceeds First Amendment

limitations in its deterrence of protected erotic expres-

sion. The specter of RICO prosecution solely for two ob-

seenity violations’ creates an informal regime of self-

censorship at least as suppressive as that imposed by the

strict-liability ordinance declared unconstitutional for that

reason in Smith.

Faced with the drastic seizure, forfeiture and other

RICO sanctions, failure to discern accurately the ‘‘dim

and uneertain line’’ separating protected expression

from obscenity is fraught with the extreme peril of for-

feiting the entire communicative business to the state. In-

evitably, many book-sellers, theater and video store opera-

tors will decide to exclude from their wares any and all

sexually-oriented materials, the protected along with the

unprotected, for fear of erring in the extremely difficult

judgment as to whether any given item might now or at

some later time be prosecuted as obscene.

Following its decision in Roth that obscenity could be

eriminalized as unprotected speech, this Court in Smith v.

California, supra, was immediately confronted with an

ordinance imposing strict liability upon a bookseller for

possession of obscene material. The Court concluded this

type of regulation would ‘‘work a substantial restriction

8 Under the Indiana RICO statute, predicate obscenity of-

fenses include even display or dissemination of non-obscene

“harmful matter” to minors, or display for sale of such material

— 500 feet of a church or school, pursuant to I.C. § 35-49-

3-3.

on the freedom of speech and of the press’’ by its chilling

effect, 361 U.S. at 150, emphasizing that ‘‘our holding in

Roth does not recognize any state power to restrict the

dissemination of books which are not obscene.’’ Id. at

152. Noting the stricter standards applicable to regula-

tion ‘‘having a potentially inhibiting effect on speech,’’

the court articulated the essential problem of such chilling

legislation: if speakers are required to act at their peril,

‘*the free dissemination of ideas may be the loser.”’ Jd.

at 151. A law like that in Smith is objectionable because it

‘‘tends to impose a severe limitation on the public’s

access to constitutionally protected matter. For if the

bookseller is criminally liable without knowledge . . .,

he will tend to restrict the books he sells to those he

has inspected, and thus the State will have imposed

a restriction upon . . . constitutionally protected as

well as obscene literature. .. . The bookseller’s limita-

tion in the amount of reading material with whiech-

he could familiarize himself, and his timidity in the

face of his absolute criminal liability, thus would tend

to restrict the public’s access to | materials} the State

could not constitutionally suppress directly. The book-

seller’s self-censorship, compelled by the State, would

be a censorship affecting the whole public, hardly less

virulent for being privately administered.’’ Jd. at

153-154.

Likewise the Indiana RICO statute, authorizing the ulti-

mate remedy of forfeiture merely for two sales or exhibi-

tions of unprotected materials, makes First Amendment

businesses ‘‘the strictest censors of their merchandise,”’

and ‘thas such a tendency to inhibit constitutionally pro-

tected expression that it cannot stand under the Constitu-

tion.’’ Jd. at 152, 155.

Knowledge of materials’ obscenity is not legally re-

quired and is rarely possible under eurrent standards; the

penalty imposed for a wrong guess upon that score thus

becomes crucial in assessing a law’s chilling effect. Build-

ing upon the Court’s concern in Smith to avoid self-cen-

sorship, this Court in New York Times Company v. Sulli-

ven, 376 U.S. 254 (1964), held that the ‘‘malice’’ stan-

dard for libel actions by public figures was essential so

that debate on public issues could remain ‘‘uninhibited, ro-

bust, and wide-open.’’ 376 U.S. at 270. In New York

Times, the Court addressed the scienter component of the

equation so as to lessen the chill created by the intimidat-

ing threat of large libel judgments. ‘‘A rule compelling

the eritie of official conduct te guarantee the truth of all

... faetual assertions ... on pain of libel judgments vir-

tually unlimited in amount’’ creates an intolerable degree

of self-censorship, t/. at 279; so too does a rule compell-

ing booksellers and others to guarantee the non-obscenity

of all their wares, on pain of limitless RICO forfeiture

judgments. The resulting ‘‘pall of fear and timidity . . .

is an atmosphere in which the First Amendment freedoms

eannot survive.’’ Jd. at 278.

The facts of this case, and the equally egregious out-

come of the first federal RICO/obscenity prosecution in

United States v. Pryba, demonstrate that the in terrorem

effect of this and other RICO statutes predicated upon

obscenity is no idle, hypothetical threat to the exercise of

First Amendment rights and the circulation of protected

mtaerials. In Pryba, 674 F.Supp. 15044 (E.D.Va. 1981),

the trial court upheld the constitutionality of the federal

criminal RICO statute as applied to obscenity, concluding

as did the Indiana Supreme Court that the statute simply

did not implicate the First Amendment at all, and that

‘‘whatever chilling effect [the RICO forfeiture provisions |

may have is legitimate and intended.’’ 674 F.Supp. at

1513. The ensuing forfeiture order,*® like the forfeitures

sought in this case, authorized the government to confis-

cate the entire assets of five communicative businesses,

including ‘‘the assets of three shops where customers

could rent a variety of videocassettes, everything from

family fare like the film ‘Star Wars’ to sexually-explicit

tapes,” the New York Times reported.*’

This current wave of RICO/obscenity prosecutions

and civil forfeiture actions sends an unmistakable message

to any bookstore, periodical, video store, or theater which

would make so bold as to disseminate any materials deal-

ing candidly with sernality. Despite the enormous popu-

larity of sexually-oriented films, and despite the fact that

a great deal of such entertainment is clearly non-obscene

and protected by the First Amendment, the obscenity ap-

plication of RICO statutes represents highly politicized

pressure aimed at curtailing all erotic expression, including

56 The Pryba forfeiture order is reproduced as Appendix B

to this Brief, App. 9-13.

dd As the Times further noted, “the Justice Department plans

to seek a series of racketeering indictments this year designed

to seize tens of millions of dollars from the distribution and

sale of sexually-explicit material.” “U.S. Planning Major Drive

Against Big Pornographers,” January 12, 1988.

protected materials.** The clear warning to all communi-

cative businesses is to ‘‘steer far wider of the unlawful

zone,’’ by self-censoring any materials which could pos-

sibly trigger the confiseatory sanctions of the RICO Act.

CONCLUSION

As applied to obscenity, Indiana’s civil RICO statute

is among the most severe threats to protected expression

ever to come before this Court for review. Petitioner re-

spectfully submits that this Court should strike the entire

statute as facially unconstitutional in its application to

obscenity and should reverse the judgment of the Indiana

Supreme Court.

DATED: May 12, 1988

Respectfully submitted,

Joun H. Weston*

Davin M. Brown

G. RaxnpaLtu Garrou

Brown, Weston & Sarno

Counsel for Petitioner

Fort Wayne Books, Inc.

Lee J. Kier

Of Counsel

38 ~=- The Pryba court, as noted above, frankly recognized that

the RICO forfeiture provisions are ‘intended’ to have a chill-

ing effect. 674 F.Supp. at 1513. Likewise the Meese Commis-

sion candidly ack ged the unconstitutional purpose to ef-

fect a prior restraint underlying these statutes: “RICO pro-

vides an effective means to tantially eliminate obscenity

businesses.’” Attorney General's Commission on Pornography,

Final Report at p. 498 (July 1986).

App. 1

APPENDIX A

INDIANA CIVIL AND CRIMINAL RICO STATUTES

CHAPTER 30.5

CIVIL REMEDIES FOR RACKETEERING ACTIVITY

34-4-30.5-1. Definitions—As used in this chapter:

‘‘Aggrieved person’? means a person who has an in-

terest in real property or in an enterprise that:

(1) Is the object of corrupt business influence

(IC 35-45-6-2); or

(2) Has suffered damages or harm as a result

of corrupt business influence (IC 35-45-6-2).

‘‘Enterprise’’ means the same as the definition of

that term found in IC 35-45-6-1. [IC 34-4-30.5-1, as

added by Acts 1980, P.L. 199, § 1; P.L.3808-1895, § 1.]

34-4-30.5-2. Action by prosecuting attorney to enjoin

violation of IC 35-45-6-2—Orders.—The prosecuting at-

torney in a county in which the violation occurs, may bring

an action to enjoin a violation of IC 35-45-6-2. An action

under this section may be brought in any cireuit or su-

perior court in a county in which the violation occurs.

If the court finds by a preponderance of the evidence that

a violation of IC 35-45-6-2 has oceurred, it may:

(1) Order a defendant to divest himself of any in-

terest in any enterprise or real property;

(2) Impose reasonable restrictions upon the future

activities or investments of a defendant, including

prohibiting a defendant from engaging in the same

type of endeavor as the enterprise in which he was

engaged in violation of IC 35-45-6-2;

(3) Order the dissolution or reorganization of any

enterprise ;

App. 2

(4) Order the suspension or revocation of a license,

permit, or prior approval granted to any enterprise

by any agency of the state;

(5) Order the forfeiture of the charter of a corpora-

tion organized under the laws of Indiana, or the revo-

cation of a certificate authorizing a foreign corpora-

tion to conduct business within the state, upon finding

that the board of directors or a managerial agent

acting on behalf of the corporation, in conducting the

affairs of the corporation, has authorized or engaged

in conduct in violation of IC 35-45-6-2 and that, for

the prevention of future criminal activity, the public

interest requires the charter of the corporation for-

feited and thé corporation dissolved or the certificate

revoked; and

(6) Make any other order or judgment that the court

considers appropriate.

In any order or judgment made by the court under this

section, the judge shall make due provision for the rights

of innocent persons. [IC 34-4-30.5-2, as added by Acts

1980, P.L. 199, §1.]

34-4-30.5-3. Action by prosecuting attorney for for-

feiiure of property—Orders—(a) The prosecuting at-

torney in a county in which any of the property is located,

may bring an action for the forfeiture of any property used

in the course of, intended for use in the course of, derived

from, or realized through, conduct in violation of IC 35-

45-6-2. An action for forfeiture may be brought in any

cireuit or superior court in a county in which any of the

property is located. Upon a showing by a preponderance

of the evidence that the property in question was used in

App. 3

the course of, intended for use in the course of, derived

from, or realized through, conduct in violation of IC 35-

45-6-2, the court shall order the property forfeited to the

state, and shall specify the manner of disposition of the

property including the manner of disposition if the proper-

ty is not transferable for value. The court shall order

forfeitures and dispositions under this section with due

provision for the rights of innocent persons.

(b) When an action is filed under subsection (a),

the prosecutor may move for an order to have property

subject to forfeiture seized by a law enforcement agency.

The judge shall issue such an order upon a showing of

probable cause to believe that a violation of IC 35-45-6-2

involving the property in question has occurred. [IC 34-4-

30.5-3, as added by Acts 1980, P.L. 199, § 1.]

34-4-30.5-4. Seizure of property by law enforcement

officer—Seizure without court order—Disposition pending

forfeiture and final disposition—Return to owner.—(a)

Property subject to forfeiture under this chapter shall be

seized by a law encorcement officer upon court order.

Seizure may be made without court order only if:

(1) The seizure is incident to a lawful arrest or

search, or to an inspection under an administrative

inspection warrant; or

(2) The property subject to seizure has been the

subject of a prior judgment in favor of the state in

a forfeiture proceeding under this chapter.

(b) When property is seized under subsection (a),

pending forfeiture and final disposition, the law enforce-

ment officer making the seizure may:

App. 4

(1) Place the property under seal;

(2) Remove the property to a place designated by

the court; or

(3) Require another agency authorized by law to

take custody of the property and remove it to an ap-

propriate loeation.

ject to [replevin], but is considered to be in the custody

of the law enforcement officer making the seizure, sub-

ject only to order of the court. However, if a seizure of

property is made in accordance with subsection (a), the

prosecuting attorney shall promptly bring an action for

forfeiture under section 3 [34-4-30.5-3] of this chapter. If

an action is not filed within one hundred eighty [180]

davs after the date of the seizure, the law enforcement

agency whose officer made the seizure shall return the

property to its owner. [IC 34-4-30.5-4, as added by Acts

1980, P.L. 199, §1.]

34-4-30.5-5. Actions by aggrieved person.—(a) An

aggrieved person may bring an action for injunctive re-

lief from corrupt business influence in a cireuit or su-

perior court in the county of the aggrieved person *s resi-

dence, or in a county where any of the affected real prop-

erty or the affected enterprise is located. If the court

finds, through a preponderance of the evidence, that the

aggrieved person is suffering from corrupt business in-

fluence, it shall make an appropriate order for injunctive

relief. This order must be made in accordance with the

principles that govern the granting of injunctive relief

from threatened loss or damage in other civil cases, ex-

App. 5

cept that a showing of special or irreparable damage to

the aggrieved person is not required. The court may order

injunctive relief only after the execution of a bond by the

aggrieved person for an injunction improvidently granted,

in an amount established by the court. In addition, the

court may order a temporary restraining order or a pre-

liminary injunction, but only after a showing of immediate

danger of significant loss or damage to the aggrieved

person.

(b) An aggrieved person may bring an action against

a person who has violated IC 35-45-6-2 in a cireuit or

superior court in the county of the aggrieved person’s

residence, or in a county where any of the affected real

property or the affected enterprise is located, for dam-

ages suffered as a result of corrupt business influence.

Upon a showing by a preponderance of the evidence that

the aggrieved person has been damaged by corrupt busi-

ness influence, the court shall order the person causing

the damage through a violation of IC 35-45-6-2 to pay to

the aggrieved person:

(1) An amount equal to three (3) times his actual

damages ;

(2) The costs of the action;

(3) A reasonable attorney’s fee; and

(4) Any punitive damages awarded by the court and

allowable under law.

titled to a trial by jury in an action brought under this

section.

App. 6

(d) An aggrieved person has a right or claim to

forfeited property or to the proceeds derived from a

feited property superior to any right or claim the state

has in the same property or proceeds.

(e) If the state is an aggrieved person, the attorney

general has concurrent jurisdiction with the prosecuting

attorney to bring an action under this section. [IC 34-4-

30.5-5, a added by Acts 1980, P.L. 199, 61; P-L. 308-1985,

§ 2.)

34-4-30.5-6. Collateral estoppel.—In any

brought under this chapter, the principle of collatera

estoppel operates to bar relitigation of the issues rr

ly determined in a eriminal proceeding under IC 35-45-6-2.

[IC 34-4-30.5-6, as added by Acts 1980, P.L. 199, § 1.)

action

CHAPTER 6

RACKETEER INFLUENCED AND

CORRUPT ORGANIZATIONS

(CRIMINAL RICO STATUTE)

35.45-6-1. Definitions.—As used in this chapter:

‘‘Documentary material’’ means any document, draw-

ing, photograph, recording, or other tangible item con-

‘ ‘led data from which information can be

taining comp )

obtained or can be translated into a usable form.

‘‘Enterprise’’ means a:

(1) Sole proprietorship, corporation, partnership,

business trust, or governmental entity; or

(2) Union, association, or group, whether a legal

entity or merely associated in fact.

App. 7

‘Pattern of racketeering activity’? means engaging

in at least two [2] incidents of racketeering activity that

have the same or similar intent, result, accomplice, vie-

tim, or method of commission, or that are otherwise inter-

related by distinguishing characteristics that are not iso-

lated incidents; however, the incidents are a pattern of

racketeering activity only if at least one of the incidents

occurred after August 31, 1980, and if the last of the in-

cidents occurred within five [5] years after a prior inci-

dent of racketeering activity.

‘*Racketeering activity’? means to commit, to attempt

to commit, or to conspire to commit a violation, or aiding

and abetting in a violation, of a provision of IC 23-2-1,

or of a rule or order issued under IC 23-2-1; a violation of

IC 35-47; a violation of IC 35-49-3; murder (IC 35-42-1-1) ;

battery as a class C felony (IC 35-42-2-1); kidnapping

(IC 35 2-3-2); child exploitation (IC 35-42-4-4) ; robbery

(1C 35-42-5-1) ; arson (IC 35-43-1-1) ; burglary (IC 35-43-2-

1); theft (IC 35-43-4-2) ; receiving stolen property (IC 35-

43-4-2) ; forgery (1C 35-43-5-2) ; fraud (1C 35-43-5-4) ; brib-

ery (IC 35-44-1-1) ; offical misconduet (IC 35-44-1-2) ; con-

flict of interest (IC 35-44-1-3) ; perjury (1C 35-44-2-1) ; tam-

pering (IC 35-44-3-4) ; intimidation (IC 35-45-2-1) ; promot-

ing prostitution (IC 35-45-4-4); promoting professional

gambling (IC 35-45-5-4); dealing in cocaine or a narcotic

drug (IC 35-48-4-1) ; dealing in a schedule I, IT, or TIT con-

trolled substance (IC 35-48-4-2); dealing in a schedule IV

controlled substanee (IC 35-48-4-3); dealing in a schedule

V controlled substance (IC 35-48-4-4); or dealing in mari-

juana, hash oil, or hashish (IC 35-48-4-10). [IC 35-45-6-1,

as added by Acts 1980, P.L. 199, § 2; P.L.190-1984, § 1.]

App. 8

35-45-6-2. Corrupt business influence—Penalty.—(a)

A person:

(1) Who has knowingly or intentionally received

any proceeds directly or indirectly derived from a pattern

of racketeering activity, and who uses or invests those

proceeds or the proceeds derived from them to acquire

an interest in real property or to establish or to operate

an enterprise ;

(2) Who through a pattern of racketeering activity,

knowingly or intentionally acquires or maintains, either

directly or indirectly, an interest in or control of real

property or an enterprise; or

(3) Who is employed by or associated with an enter-

prise, and who knowingly or intentionally conducts or

otherwise participates in the activities of that enterprise

through a pattern of racketeering activity; commits cor-

rupt business influence, a Class C felony. [IC 35-45-6-2,

as added by Acts 1980, P.L. 199, § 2.]

App. 9

APPENDIX B

ORDER OF FORFEITURE IN United

E.D.Va. Crim. No. 87-00208.A ENTERED ‘Nov. is tee?

IN THE UNITED STATES DISTRICT J

Y COL

FOR THE “

EASTERN DISTRICT OF VIRGINIA

Alexandria Division

UNITED STATES OF AMERICA )

Criminal

Vv. No. 87-00208-A

DENNIS E. PRYBA,

BARBARA A. PRYBA,

JENNIFER C. WILLIAMS, and

EDUCATIONAL BOOKS, INC

(Filed November

18, 1987)

Seer re ee See ee

ORDER OF FORFEITURE

WHEREAS, in the Indictment, in the above-entitled

case, vlaintiff, the United States of America, sought the

forfeiture of certain properties of defendants Dennis E.

Pryba and Barbara A. Pryba (hereinafter referred to as

the ‘‘defendants’’) pursuant to 18 U.S.C. § 1963;

AND WHEREAS, on November 10, 1987, a jury found

the defendants guilty of 18 U.S.C. § 1962(a), (ce) and (d);

. AND WHEREAS, on November 18, 1987, the same

jury found that the defendants have certain interests in

properties listed below which afforded them a source of

influence over the enterprise in violation of 18 U.S.C.

§ 1963(a).

App. 10

NOW THEREFORE IT IS ORDERED that the

following properties are forfeited to the United States

of America:

e- &

m4 ye

A parcel of property commonly known 4s 8411 Old

acthewe Pike, Unit 15, Upper Marlboro, Maryland,

part of the Penn Belt Industrial Condominium com-

plex; purchased in the names of Dennis and Barbara

Pryba on or about February 28, 1983 and recorded

in the record office of Prince George’s County, Mary-

land, in Deed Book 5652, Page 211.

All shares of stock of B & D Corporation.

All shares of stock of Educational Books.

All shares of stock of Marlhoro News, Ine.

All shares of stock of Home Video Sales, Ine.

All shares of stock of Video Shop, Ltd.

ll corporate assets of B & D Corporauon, located

- 8411 Old Marlboro Pike, Upper Marlboro, Mary-

land, including, but not limited to, inventory, United

States “urrency, bank accounts (ineluding Citizens

Bank & Trust account No. 037-0341 and National Bank

of Maryland account No. eng a equip-

ent, coin boxes, furniture, ures, t

(incloding a 1981 Audi VIN No. WAUHC0438BN

03154), and all shares of stock in Educational Books,

Ine., Marlboro News, Ine., and Home Video Sales.

All corporate assets of Educational Books, Inc., lo-

cated at 9158 Richmond Highway, Ft. Belvoir, Vir-

ginia, ineluding, but not limited to, inventory, United

States Currency, bank accounts (ineluding Ist Ameri-

ean Bank of Virginia account No. 60055123), coin box-

es, cash registers, movie machines, and fixtures.

located

All corporate assets of Marlboro News, Ine.,

at 7609 Marlboro Pike, Forrestville, Maryland, and

7425 Annapolis Road, Hyattsville, Maryland, ineluding

but not limited to, inventory, United States Currency,

10.

11.

App. 11

bank accounts (including Citizens Bank & Trust ae-

count no, 0397258 and Sovran Bank account No. 46-

05290-3), furniture, fixtures, machinery, equipment,

cash registers and projectors.

All corporate assets of Home Video Sales, Inc., lo-

cated at 8411 Old Marlboro Pike, Upper Marlboro,

Maryland, including, but not limited to, United States

Currency, bank accounts (including Ist National Bank

of Maryland account No. 6215279-8), video machines,

copy machine, vehicles (including a 1982 BMW 3201

VIN No. WBAAG4303C8069688), and all shares of

stock of Video Shop, Ltd.

All corporate assets of Video Shop, Ltd. which corpo-

rate address is 8411 Old Marlboro Pike, Upper Marl-

boro, Maryland, (d/b/a Video Rental Centers at the

below-listed locations: including, but not limited to,

video tape cassettes, United States Currency, bank

accounts (including Maryland National Bank account

No. 512012386, United Virginia Bank account No.

080-04-978, and First Virginia Bank account No. 0774-

0344), computers, safe, vehicles (including a 1986

Chevrolet Astro Van VIN No. 1GCDM15206B118910,

a 1985 Chevrolet Blazer VIN No. 1G8CT1SB4F0210345,

and a 1986 Chevrolet Sprint VIN No. JG1MR6852-

GK806925).

(a) 804 Rockville Pike

Rockville, Md.

(b) 10288 Festival Lane

Manassas, Va.

(ec) 6193 Livingston Rd.

Oxon Hill, Maryland

(d) 9156 Richmond Hwy.

Ft. Velvoir, Va.

(e) 8328 Richmond Hwy.

Alexandria, Va.

(f) 13711-A Jefferson Davis Hwy.

Woodbridge, Va.

App. 12

(g) 277 S. Van Dorn

Van Dorn Plaza

Alexandria, Va.

(h) 3525 S. Jefferson St.

Leesburg Pike Plaza

Bailey’s Crossroads, Va.

(i) 13748 Smoketown Road

Dale City, Va.

IT IS FURTHER ORDERED that the Attorney

General is authorized to seize the property and dispose

of it in accordance with law.

IT IS FURTHER ORDERED that the United States

shall publish notice of this Order and its intent to dispose

of the property in such manner as the Attorney General

may direct. Any person, other than the defendant, assert-

ing a legal interest in the property shall, within thirty (30)

days of the final publication of this notice, or his receipt of

direct written notice, whichever is earlier, petition the

Court for a hearing to adjudicate the validity of his al-

leged interest in the property. The petition shall be signed

by the petitioner under penalty of perjury and shall set

forth the nature and extent of the petitioner’s right, title,

or interest in the property, the time and circumstances of

the petitioner’s acquisition of the right. title, or interest

in the property, and additional facts supporting the pe-

titioner’s claim, and the relief sought.

IT IS FURTHER ORDERED that following the

Court’s disposition of all petitions filed, or if no such

petitions are filed following the expiration of the period

specified for the filing of such petitions, the United States

App. 13

shall have clear title to the property and may warrant good

title to any subsequent purchaser or transferee,

Dated: 11/18/87

/s/ T.8..Ellis, 111

UNITED STATES

DISTRICT JUDGE

By: /s/ Renee Spivey

Deputy Clerk

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.