*1 promises By payments payments, court district later found was self-inflict- discovery Great Coastal frustrated of its ed—was inextricably tied in with sec- through judicial processes fraud afford- boycott. ondary litigant Like the in Hazel- ed the Rules of Atlas, Civil Procedure. More- position Great Coastal is in no over, entry its scheme did not with the end dispute the its effectiveness of fraud. judgment. litigant Like the Hazel-At- I would reverse order the district las, attempted it later seal its forever court, afford union equitable relief on deception by large the payment of sums of court, petition its filed in this and set aside money participants in its fraudulent because, tested Hazel-At- And, Hazel-Atlas, scheme. as in it succeed- las, Great Coastal committed a fraud ed in cloaking wrong years. its for several the court. I therefore case conclude this satis- fies requirement the second of Hazel-Atlas.
V
Finally, find merit in no Great Coastal’s
argument the fraud did not taint its
recovery damages. While the evidence
concerning secondary boycott was suffi- verdict,
cient
present-
to sustain a
this issue
FEHLHABER,
al.,
Roger
Appellees,
et
questions
ed
jury
liability
for the
on
both
and damages.
II
As
opinion points out,
CAROLINA,
it cannot
said
“with
STATE OF NORTH
Edward
complete
Grannis,
Attorney
confidence ...
that the fraud was W.
District
harmlessly
Carolina,
excised from the case.”
12th Judicial District of North
the majority opinion
etc.,
al.,
states:
“We are in
Appellants.
et
complete accord with the conclusions of the
No. 78-1112.
60(b)(3)
district court that
pro-
would have
Appeals,
vided
United
relief in
States
this case had the union’s
”
motion
Fourth Circuit.
timely
been
...
.
Great Coastal’s argument is similar to the
Argued Oct.
1981.
argument
rejected in Hazel-Atlas that
April
Decided
fabricated evidence was not “basic” to the
judgment under attack.
There the Court did attempt appraise
the effect of the fraud the decision mak-
ing process. Instead, pointed out that the litigant
'fraudulent spurious deemed the
document to be litigant material. The con-
trived the fraud patent to deceive the office therefore, litigant,
and the court. The was
“in position dispute no now to its effective-
ness.” 322 U.S. at at 1002. posture
Great Coastal is same litigant fraudulent in Hazel-Atlas.
Great Coastal’s was fraud conceived and
used to deceive the National Labor Rela-
tions Board and appellate both trial and
courts. jury found liability
exposed appeal fraud. On Great argued
Coastal that violence—which
1366
preme Court, we think the North Carolina effectively statute survives First and Four- teenth analysis. Amendment action, plaintiffs in this operators of stores,” sought “adult book declaratory 19, Chapter Article 1 of the Carolina, General Statutes of North as en- 1977, acted in facially unconstitutional. In the district court there were numerous grounds attack, Fehlhaber v. State of Carolina, (E.D.N.C. North F.Supp. 445 130 1978), most of which were against resolved plaintiffs, but the district court found provision 19-5’s for § invalid insofar as applied yet not materials judicially declared to be obscene. From adverse decision North Carolina here, brought the case and that is the question before us. appeal abeyance
We held the pending resolution of litigation the “Chateau X” pending then in the Supreme Court of North upheld Carolina. That court statute. of North State Carolina Ex Rel. Inc., Andrews v. X Chateau 296 N.C. (1979). 250 603 S.E.2d vacated that judgment, X Inc. v. Chateau Andrews, 445 U.S. 63 Ziko, Gen., Thomas J. Atty. Associate Ra- L.Ed.2d 782 and remanded for recon- leigh, (Rufus Edmisten, N. Gen., C. L. Atty. light sideration in of Vance v. Universal Lake, I. Beverly Jr., Schiller, Marvin Ra- Co., Amusement C., leigh, brief), N. appellants. for Upon L.Ed.2d reconsid- Seekford, Towson, Md., William E. eration, the North appellees. concluded the North Carolina statute did not have the deficiencies the Texas HAYNSWORTH, Before Senior Circuit statute struck again down Vance. It Judge, MURNAGHAN, and PHILLIPS and concluded that the North Carolina statute Circuit Judges. applied constitutional as in Chateau X. Apparently, no further review of that case HAYNSWORTH, Senior Judge: Circuit sought been Court of This is another skirmish in the battle of the United States. the purveyors of hard pornography, core While this appeal was thus in abey- held seeking protection precious val- ance, the North Carolina statute had been ues of Amendment, the First legislative subjected construction, to a limiting and we bodies, seeking protection to lend to other have been given advantage of the Su- societal supportive values morality preme similar, analysis Court’s of a decorous communities. The North Carolina defective, statute in Vance. legislature injunctive chose the civil abate- control, ment route for a route with many advantages With those which the District hazards to but, successful negotiation, Judge have, did not we conclude that now interpreted by the North Carolina Su- statute is facially unconstitutional. whole,
I. and in context in which it used, artistic, possesses literary, serious The North Carolina nuisance educational, political, or scientific value. obscenity. is directed material, does apply to written and it 19-1.2 By prohibited nuisances are regulates trafficking commercial in obscene any place defined where lewd films *3 pictorial only material if the exhibition of publicly predominant are exhibited as a and predominant obscene is “a regular films and regular place course of business and a course of business” other and if obscene publications business which lewd consti- principal materials are “a or sub- principal tute a or substantial part the stantial of the in trade.” Thus stock stock in trade. publi- Lewd films and lewd the the clearly apply does not to possessed cations for commercial exhibition operator carrying of a newsstand materials or in any sale such are also made glace newsstands, usually to be found in in hotels nuisances, possessed if place at a but terminals, and airline but who carries a which is a nuisance. magazine, an occasional issue of which provisions Other relevant of the statute might challenged clearly, be as obscene. As may be in the language described store, apply does not to a book however district court: salacious some of the written material instigate To enforcement under the may means, the books be. such the By statute, attorney general the or a local legislature North Carolina its confined (Section district attorney 19-2.1) is autho- nuisance abatement authorization to thea- superior to rized file in a court verified ters regularly showing pornographic films complaint the alleging constituting facts to adult audiences and “adult book (Section 19-2.2). the Applica- nuisance operated stores” with coin film projectors a preliminary injunction tion for may be explicitly showing activity photo- sexual or state, made hearing with a held on graphs or pictorial magazines showing simi- (Sec- days filing the motion within ten lar activity, or two or three of them. 19-2.2). tion The “lewd matter” at which the statute is an application If for a preliminary in- 19-1.1(2) directed is defined in in the junction made, the court is authorized California, terms of Miller parte to issue an ex restrain- temporary but with order, ing solely purpose pre- additional explicit provides: limitations. serving (Section 19-2.3). the evidence (2) synonymous “Lewd matter” is with may The order not restrict the distribu- “obscene matter” any and means matter: trade, any tion of stock in (a) the average person, Which applying defendant is required from the time of standards, contemporary community keep accounting service to a full of all find, whole, would when considered as a alleged transactions in materials in the interest; appeals prurient complaint (Section 19-2.3). to be obscene (b) depicts Which patently offensive Furthermore, the defendant at any representations of: after time issuance move for the dissolu- acts, 1. Ultimate sexual normal or temporary restraining tion of the order. simulated; perverted, actual or motion Such shall heard within twen- Masturbation, functions, excretory ty-four filing, hours of with the burden or genitals lewd exhibition remaining on justify state to its con- area; genital (Section 19-2.3, If, 2). tinuance follow- sadism; 3. Masochism or ing the hearing preliminary in- 4. Sexual acts with child or a animal. junction, court determines true,
Nothing preliminary injunc- herein allegations contained are a intended include or proscribe writing any required restraining or writ- tion is issue material, ten nor to proscribe include or continuing defendant from the nuisance which, any matter pendente (Section 19-2.5). when considered as a lite than subject penalty to a of a fine of no less 19-2 of the statute awards Section $1,000 imprison- or by the docket nor more than permanent hearing priority on $200 matters; less than county jail if in the for no virtually over all other civil ment established, more than six months. Section of a nuisance is three nor the existence to enter an order the court is directed 19-4. enjoin the de- “perpetually
abatement however, itself, un- leaves The statute person from fur- fendant other questions, including the nature clear several nuisance at maintaining ther persuasion resting upon burden of of, and the defendant place complained during proceeding the abatement the state maintaining such nuisance else- from contempt proceeding, during any jurisdiction of this where within the single whether the exhibition or sale of 19-2). (Section “Such order State.” support item would *4 closing of the require also the effectual finding contempt might and whether a thereafter for the place against its use judicial a final deter- be sustained without conducting any such nui- purpose of forming the mination that the materials 19-5, 112). (Section sance.” were, fact, in contempt charge of the basis against A whom an abate- defendant Supreme By interpretation, obscene. injunction is entered be or- ment supplied of North has an- Court Carolina equal gross pay damages dered to to his questions. swers to these received, prelimi- a entry income after nary injunction, from the sale or distribu- II. tion of books or movies determined to be Inc., X 296 N.C. Andrews v. Chateau lewd. He also be liable for court injunc- considered an 250 S.E.2d (Sec- attorney’s costs and reasonable fees by superior Chapter under tion a court 19-6). tion appealed, contending that the The state had statutory The scheme is that one basic injunction go enough, far while the did not operating by accused of a nuisance the exhi- appealed, complaining that it defendants bition or sale of lewd materials should have judge In that the trial went too far. case fullfledged during a trial he civil which ran picture had a motion entitled “Air- viewed imposition no risk of a pen- of the criminal Cockpit” magazine line and a entitled alty. expressly provides The statute for a “Spread films and Legs.” Your Similar jury if the defendant wants one. An abate- exhibits, and magazines were introduced as injunction ment jury would issue if the parties stipulated had that the entire that the found exhibition of lewd films was comparable inventory depicted of the store predominant a regular course of busi- basis, photographic this material. On pictorial if other obscene material ness inventory judge trial found that the entire was principal part a or substantial of his obscene, depicted by was it was temporary stock in trade. If a restraining Supreme being North as Carolina Court n issued, might order had been he be held pornography.” “hard core receipts accountable for interim from the injunction superior The issued pictorial sale or exhibition obscene mate- simply statutory in the court was not cast rials, but penalty imposed. no other could be to make prohibition. terms of undertook While provision prelimi- there is a for a within the specific more the sexual acts nary injunction, provision there is a for the injunction against pictorial reach of the dis- advancement of the trial on the merits to injunc- play. complained that the The state the hearing upon on the motion the motion prohibited enlarged tion exhibits of male of either party. Section 19-2.4. while in sexual contact genitalia and female state, issued, statute, injunction
After an reached abatement contended subject any defendant is to trial on a con- exhibit. The North Carolina obscene tempt charge rejected conten- injunc- Supreme for a violation of the the state’s Court tion, violation, tion, upon duty but holding of a he is that it was beyond a all reasonable doubt elements judge exercise the discretion vested trial offense, injunction including to make the as him so as the absence such better to inform the specific possible, redeeming value. prohibited
defendants what was and what complained defendant the in- was not. junction not expressly did limit its reach to injunction, superior against court the material that was patently offensive. The material, specifi- future sale of obscene was rejected North Carolina Court cally subjected statutory limitation contention, holding inclusion principal that such material be “a sub- adequately terms defined in the statute lim- part of stantial the stock trade.” The patently ited its reach to offensive material. against state contended that should run injunction it held that the could not sale. The North Carolina obscene, reach material that was legally rejected that contention. Under the the sale which could constitutionally statute, selling of obscene ma- subjected to criminal sanctions. terial is not a nuisance unless that material Finally, the North principal constitutes a or substantial contempt that any held citation the stock in trade. When that condition is alleged injunction an violation met, every item of material obscene de- subject summary North Carolina’s nuisance, clared the statute to be a but disposition procedures, may only prohibit continua- plenary during the state’s procedures, which *5 nuisance, resumption. tion of or its the proof the state must shoulder the of burden Thus, isolated sales of obscene ma- of all beyond elements of the offense a injunction; will terial not violate the the statutory reasonable doubt. It viewed the will be violated sales contempt procedure being as a criminal con- prohibited when the material constitutes a tempt proceeding. It viewed the absence of in part substantial of the stock trade. The provision jury a for a in trial required by limitation is the statute. 1 proceeding permissible since the autho- Supreme North Court of Carolina penalty rized not may exceed a fine of question held that a as to whether 19-5 $1,000 imprisonment or jail in the local for might be as authorizing construed a com- months, no more six than both. plete closure of a store found to have been course, conclusion, Its that a it, nuisance was properly before but statute facially was constitutional and as held that such a closure could not be consti- applied in X. Chateau tutionally effected. It viewed such a clo- petition While a for a writ of certiorari in restraint, prior sure as a that held pending, Chateau X was the United States injunction was properly limited to later Supreme Court decided Vance v. Universal constituting commercial conduct a nuisance Co., Amusement 445 100 U.S. S.Ct. under the statute. (1980), dealing with a On their appeals, the defendants com- statutory somewhat similar scheme in Tex- plained placed that statute the burden as, which a the members of proof that material lacked redeeming found defective. It Court then artistic, literary, political, educational sci- vacated the of the North Carolina upon entific value them. On appeal, the remanded Chateau X defendants did not contest in light further consideration all of the items for display or sale in Andrews, Vance. Chateau X Inc. obscene, store were they earlier had U.S. L.Ed.2d 782 leveled a upon facial attack the statute upon ground. The North Carolina Su- preme reconsideration, Court construed the statute On the North Carolina placed upon the state the burden proving concluded that the North expressly provides right jury injunctive 1. The proceeding-. a to trial a not have the ments of an offense which it could upon statute did defects Vance, It read penal the Texas statute. as invali- The defendant is en- visit sanctions. authorizing trial, dating pri- the Texas statute as titled if he wants it. jury to a Un- duration on the or restraints of indefinite doubtedly, X proprietor Chateau pictures that had not of motion exhibition prison, North could have been sent to had and, at adjudicated obscene finally been Instead, route. Carolina chosen that films, named respect least with to as mak- stage, imposes penal no sanction subject ing contempt pro- an exhibitor telling upon him. It contents itself with though the films ceedings even named law; him, “you go have and sin violated adjudicated might finally be as not obscene. no more.” its earlier conclusion that reaffirmed injunc- While under the constraint of the authorized restraints North Carolina’s tion, perfectly oper- free to defendant of an nui- subsequent maintenance obscene ate a legitimate may pic- business. He sell sance were constitutional. magazines. torial as he long and other So magazines usually stocks the kind of to be III. stands, magazine found on news and he agree reading We North with Carolina’s need not be concerned that an occasional of Vance and that the North Carolina stat- might item be to be obscene. He found ute does not contain the Texas defects. Hustler, carry need not for even if refuse Section a temporary 19-2.3 authorizes re- particular of that magazine issue should straining designed prevent order re- context, be found obscene another he moval of evidence. Removal of the inven- guilty would not be of a violation of the tory allegedly obscene may items be re- injunction, explicitly with more defined re- strained. ordinary Sales in course straints and with the limitation that his restrained, business be but records business may violating not be found to be a of such required be transactions nuisance unless a substantial of his kept. Sections 19-2.4 and together 19-2.5 inventory prohibited material. *6 preliminary injunction, authorize a but the Thus, injunction a defendant under an second of paragraph 19-2.4 authorizes § need have no if he opens fear traditional the court to the advance trial on the merits magazine reopens stand in a hotel. If he event, hearing the the motion. any In “adult and explicit bookstore” fills it with 19-3, under trial on the the merits must displays activity of altogether sexual com- be held at following the next term of court parable with the materials for the sale of the filing complaint. of the given It is already which he has been found to be in priority cases, over other except all civil law, violation of the the fact that different election or contests other cases. couples performing were does not detract Thus, preliminary no restraints of indefinite from adequacy the of his forewarning. Moreover, duration are authorized. there can be no of contempt until the Blackstone’s famous dictum against prior state proven beyond has a reasonable doubt upon public speech restraints prologue is a that the defendant subsequently operat- has to our rule exemplified by constitutional prohibited nuisance, ed a a commercial en- Minnesota, Near v. 283 U.S. terprise in which least a substantial 75 L.Ed. It is founded of the the business is exhibition or of sale upon the notion one not know obscene material. say speaks what one will before he or what a writer approach publishes. North Carolina’s will write before he It problem is gentler imposition principle than the is the of the of embodiment that the ordinary criminal sanctions. During exchange the in- free of ideas will contribute to a junctive proceeding, Near, the state prove distillation of But as Black- must truth. beyond stone, all reasonable doubt all upon the ele- with restraints concerned 2. 4 Bl.Comm. key or lated conduct criminal
the
of verbal
written words.
statute. The
utterance
ideas,
the
the
is with
articulation
feature
this civil nuisance statute re-
social,
political mains, however,
or
expression
power
gives
economic
it
rule, en-
enjoin,
comment that our constitutional
state’s courts
permanently
under
Amendment,
primar-
sanction,
is
peril
throned in
First
sale
por-
ily
Explicit photographic
judicial
concerned.
exhibition of materials that no
tri-
activi-
trayals
yet
of natural and deviant sexual
bunal has
be
determined to
obscene.
ty
plain
They may
stand
far below.
upheld
The
Court has never
such a
carry
message,
poten-
but their
contrary,
some social
statute. On the
ever since Near
Olson,
tial contribution to the distillation
truth
ex
Minnesota
rel.
negligible compared
spoken
to that of the
IV.
injunctions prohibiting
from civil
the distri-
yet
bution of
All written material is
from the
material
found to be out-
excluded
protection
side first
reach of the North Carolina statute.
If
amendment
and that
prior
resulting
general
from
ef-
justified,
restraint is ever
the area
in terrorem
place.
fect of criminal
prohibiting,
is the
With all of
statutes
under
sanctions,
statute,
peril
interpreted
of criminal
distributions of
safeguards
courts,
the same material.
applied by North Carolina’s
we
federal
conclude that meets
constitutional
recognized
It is true that Near itself
requirements.
protection
“previous
against
restraints”
REVERSED.
“absolutely
unlimited.”
reasoned:
PHILLIPS,
DICKSON
Circuit
JAMES
question
No
would
that a govern-
one
Judge, dissenting:
might prevent
ment
actual obstruction
majority’s
share the
discomfiture that
publication
recruiting
its
service or the
protection
this
precious
case
first
sailing
transports
dates
being
amendment values is
claimed by
troops.
number and location of
On simi-
“purveyors of hard
pornography”
core
rath-
requirements
grounds,
primary
lar
er than
beleaguered political
decency may be enforced against obscene
social
whom
protec-
dissidents for
its core
publications.
security
of the commu-
tions
surely
were most
designed. But I
nity
protected against
life
incite-
dissent from the decision that the frontiers
to acts
ments
of violence and the over-
*7
protection
do
reach so far as is
by
government.
throw
force
orderly
here
claimed.
think
front-line defens-
716,
(footnote
283
at
631
U.S.
51 S.Ct. at
es of the first
pro-
amendment must—for
omitted).
examples
permissible
These
tection of those ultimate core values—be
however,
suggest,
restraint do not
that the
to
understood
lie this far
from
core.
permitted
Near
have
Court would
an in-
More importantly, I believe that
the Su-
junction against
unprotected publica-
preme Court has consistently so read the
tions without
prior
determination that
understanding
Framers’
and intention.
they divulged
locations,
troop
or were ob-
The
opinion
scene,
carefully
and skill-
or incited violence.
fully examines
workings
down,
of the North Court cited Near when it
just
struck
Carolina obscenity nuisance statute in an
ago,
two terms
a Texas
strikingly
statute
attempt
to show its reasonableness and its
to
similar
the one under review here.
substantial
in
identity,
practical
terms
Co.,
v.
Vance
Universal Amusement
445
effect,
308,
with
in
1156,
normal
terrorem effect U.S.
1372
shortcomings
cise
supporting
injunction against
North Carolina
burden
a future
is even heavier than the
respects
exhibition
in these critical
have been
statute
justifying
imposition of a
below,
burden of
ably
by
articulated
the district court
past communica-
criminal sanction for a
(1978),
by
F.Supp.
445
130
Justice
315-16,
tion.”
Id. at
drawn more made more flexi-
ble, controlling Supreme and I read the reflecting
Court decisions exactly
judgment about the intended reach of first protections
amendment in this troublesome
realm.
I would affirm dis-
trict court. America,
UNITED STATES
Plaintiff-Appellee, Diffenderfer, ALLEN,
Arthur A. A. Peter Kolander, Kerr,
Kevin T. William P. Sherman, Sherman, Spencer
Derek S. C. Gary Theriaque, Defendants-Ap- L.
pellants. 79-1059,
Nos. 79-1060 and 79-1063
to 79-1067.
United of Appeals, States Court
Ninth Circuit.
Argued and Submitted Dec. 1979.
Decided Nov. 1980.
Rehearing Denied Dec. 1980.
As Amended on Denial Rehearing
Rehearing April En Banc