379 F.3d 96 | 3rd Cir. | 2004
ALITO, Circuit Judge: recognition of the constitutional right of
students to freedom of speech.” The T h e c a s e c o n c e r n s t h e parties do not dispute that the paper constitutionality of a Pennsylvania law that represents independent student speech, not bans advertisers from paying for the official speech disseminated on behalf of dissemination of “alcoholic beverage the University. The newspaper is advertising” by communications media published daily during the school year and affiliated with a university, college, or weekly during the summer, and it is other “educational institution.” The Pitt distributed free of charge at 75 locations News , a university newspaper, sought an around the campus. The Pitt News is injunction against enforcement of the law, displayed at these locations together with but the District Court granted summary other free weekly newspapers, including judgment for the defendants, holding that In Pittsburgh , City Paper , and UR the law “has no effect on The Pitt News’ Pittsburgh . None of these other freedom of expression” because the paper publications is affiliated with an remains free to say whatever it wishes educational institution, and they all contain about alcoholic beverages as long as it is alcoholic beverage advertisements. All of not paid for engaging in the expression. The Pitt News’ revenue is derived from
advertising, and until Act 199 took effect, We hold that the First Amendment the paper received substantial income from precludes the enforcement of the law in alcoholic beverage ads. question against advertisers in The Pitt News , and we therefore reverse the order In 1996, the Pennsylvania of the District Court and remand for the Legislature enacted an amendment to the entry of a permanent injunction. state Liquor Code that is popularly known
as “Act 199.” A provision of this amendment, 42 Pa. Stat. Ann. §4-498 I . (e)(5)(g) (hereinafter “Section 4-498”), The Pitt News is a certified student prohibits “any advertising of alcoholic organization at the University of beverages” in virtually any medium of Pittsburgh (“the University”). The mass communication that is affiliated with University has more than 25,000 students, “any educational institution,” including a c o l l e g e o r u n i v e r s i t y . [1] at least two-thirds of whom are old enough to drink under Pennsylvania law. Overall, more than 75% of the total University population (students, faculty, and staff) is [1] “Act 199” states in relevant part: more than 21 years of age. § 4 - 4 9 8 . U n l a w f u l Violations of this provision are misdemeanors and may be punished by fines of up to $500 or imprisonment for up
advertising to three months on a first charge, and by a mandatory minimum sentence of three
(e) The following shall apply months in jail for a subsequent offense. to all alcoholic beverage and See 47 Pa. Stat. Ann. § 4-494(a). malt beverage advertising: To clarify the meaning of Act 199, (4) The use in any the Pennsylvania Liquor Control Board advertisement of alcoholic (LCB) issued Advisory Notice No. 15, beverages of any subject which states in relevant part: matter, language or slogan
W h a t k i n d o f directed to minors to advertisements would be promote consumption of affected by the prohibition alcoh olic beverages is against advertisements in prohibited. Nothing in this publications published by, section shall be deemed to for and in behalf of any restrict or prohibit any educational institution? advertisement of alcoholic A dve r tise ments wh ic h beverages to those persons indicate the availability of legal drinking age.
and/or price of alcoholic beverages may not be (5) No advertisement shall contained in publications be permitted, either directly or indirectly, in any booklet, published by, for and in behalf of any educational program book, yearbook, institutions. Universities are m a g a z i n e , n e w s p a p e r , c onside re d ed uc at ional p e r i o d i c a l , b r o c h u r e , circular or other similar publication published by, for or in behalf of any newspapers, periodicals or educational institution. other publication, outdoor
advertisement, any form of (g) For purposes of this electronic transmission or s u b s e c ti o n , t h e t e r m any other printed or graphic “advertisement” shall mean matter, including booklets, any advertising of alcoholic flyers or cards, or on the beverages through th e product label or attachment medium of radio broadcast, itself. t e l e v i s i o n b r o a d c a s t , advertisement. [2] institutions under this s e c t i o n . T h u s , a n
On December 9, 1997, Terry Lucas, advertisement in a college the general manager of The Pitt News , newspaper or a college received a fax from the owner of an area f o o t b a l l p r o g r a m restaurant, the Fuel & Fuddle, which had a n n o u n c i n g b e v e r a g es previously placed alcoholic beverage would not be permissible. advertisements in the paper. The fax However, an advertisement consisted of a December 4, 1998, letter to merely indicating the name the restaurant from the Bureau of Liquor and address of a licensee or Control Enforcement of the Pennsylvania licensed premise, or an State Police (BLCE) stating that the BLCE a d v e r t i s e m e n t w h i c h had received information that the Fuel & indicates what nonalcoholic Fuddle had “advertised . . . alcoholic products may be acquired at beverages, either directly or indirectly, in the licensed premise making a publication published by, for or in behalf n o r e f er e n c e t o t h e of an educational institution” and that this availability of alcoholic could result in the suspension or b e v e r a g e s w o u l d b e revocation of its license or in the permissible. Fu rther, imposition of a fine. Based on this notice, a d v e r t i s e m e n t s i n the owner of the restaurant canceled its magazines, newspapers or advertising contract with The Pitt News, other periodicals which have and the paper, in order to protect its no con n ection to an advertisers, felt compelled to stop educational institution other a c c e p t i n g a l c o h o l i c b e v e r a g e than the fact the school may advertisements. subscribe to that particular newspaper are permissible . The Pitt News then sought to . . . persuade establishments with liquor During testimony in this case, a
representative of the LCB, Faith S. Diehl, licenses to place ads that did not refer to lacked standing to ch alleng e the the sale of alcoholic beverages, but these constitutionality of Section 4-498. The efforts were unsuccessful. In 1998 alone, District Court opined that The Pitt News the newspaper lost approximately $17,000 could not assert First Amendment rights on in revenue, and this loss affected the behalf of advertisers or readers and that length of the newspaper, as well as its the paper had not itself suffered any injury ability to make capital expenditures, in fact because it could still publish including payments for updating its anything it wanted as long as it was not computers and acquiring digital cameras. paid for it. The inability to make these capital
On appeal, a panel of this Court ( expenditures has harmed The Pitt News’ the “TPN I Panel”) affirmed the District ability to compete for readers with other Court’s denial of the preliminary newspapers. Furthermore, the newspaper injunction application, but the panel relied may be compelled in the future to begin to in part on different grounds. See The Pitt charge subscribers, and this would result in News v. Fisher, 215 F.3d 354, 360 (3d Cir. a further decrease in readership. 2000) (“TPN I”). While the TPN I Panel In April 1999, The Pitt News [3] filed agreed with the District Court that The Pitt a complaint in the United States District News did not have standing to assert the Court for the Western District of third-party claims of its advertisers and Pennsylvania against state officials readers, the panel found that The Pitt News responsible for the enforcement of the Act. did have standing to raise its own First Asserting claims under 42 U.S.C. § 1983, Amendment claims. Noting the paper’s The Pitt News alleged that Section 4-498 loss of advertising revenue, the panel held violated its constitutional rights to freedom that the paper had “demonstrated a of expression, freedom of the press, and personal stake in the outcome of this the equal protection of the laws. The Pitt litigation” and that its injury was both News moved for a preliminary injunction, traceable to Section 4-498 and redressable and an evidentiary hearing was held. by the courts. TPN I, 215 F.3d at 360
In July 1999, the District Court After determining that The Pitt denied the motion for a preliminary News had standing to challenge Section 4- injunction and held that The Pitt News 498, the TPN I Panel turned to the familiar
four-pronged preliminary injunction analysis, under which a court assesses “(a) the likelihood that the plaintiff will prevail [3] The American Civil Liberties Union on the merits at the final hearing; (b) the Student Club joined as a plaintiff, but the extent to which the plaintiff is being District Court dismissed the club for lack irreparably harmed by the conduct of standing at an early point in the complained of; (c) the extent to which the litigation, and that order is not contested defendant will suffer irreparable harm if here. the preliminary injunction is issued; and consequently did not go on to analyze any
of the other prongs. [4] (d) the public interest.” TPN I, 215 F.3d at 366. At the first step of this analysis, the
Following the decision in TPN I, TPN I panel concluded that The Pitt News the parties filed cross-motions for “ha[d] not shown a likelihood of summary judgment, and the District Court succeeding on the merits.” Id. at 367. The issued an order granting summary Court reasoned as follows: judgment for the defendants. The Pitt The fact that The Pitt News News then took this appeal. is a newspaper does not give
II.
it a constitutional right to a We exercise plenary review of a certain level of profitability, or even to stay in business at District Court decision granting summary all. . . . Thus, although it is judgment. See, e.g., Olson v. Gen. Elec. Astrospace, 101 F.3d 947, 951 (3d Cir. true that the enforcement of Act 199 has had the effect 1996). Moreover, under the circumstances of driving away certain present here, the prior panel’s decision in closely regulated businesses TPN I is not controlling. who previously advertised
When a panel is presented with in The Pitt News , this does legal issues that are related to issues not in itself amount to a previously addressed by another panel in violation of The Pitt News’ an earlier appeal in the same case at the First Amendment rights. preliminary injunction stage, three separate rules are relevant. First, it is our Court’s Id. at 366. tradition that a panel may not overrule “a The TPN I panel went on to reject holding” of a prior panel. 3d Cir. IOP 9.1. The Pitt News’ reliance on the “line of Second, it is well established that neither cases holding that it is unconstitutional to this tradition nor the law-of-the-case impose selective taxes or other financial doctrine requires a panel hearing an appeal burdens on newspapers because of their from the entry of a final judgment to content.” TPN I, 215 F.3d at 366-67. The follow the legal analysis contained in a panel found these cases to be prior panel decision addressing the distinguishable because, “[f]irst, they question whether a party that moved for involve taxes, not regulations on preliminary injunctive relief showed a advertising” and, “[s]econd, they involve fees levied directly against a newspaper.” Id. at 367. The panel thus held that The [4] The Pitt News’ petition for a writ of Pitt News had failed to satisfy the first prong of the test for the issuance of a certiorari was denied. See The Pitt News v. Fisher, 531 U.S. 1113 (2001). preliminary injunction, and the panel likelihood of success on the merits. See Court’s traditional practice, should regard University of Texas v. Camenisch, 451 itself as bound by the prior panel opinion. U.S. 390, 395 (1981); Council of
Here, the TPN I panel did not Alternative Political Parties v. Hooks, 179 decide whether Section 4-498 is or is not F.3d 64, 69 (3d Cir. 1999); American Civil constitutional. Instead, the TPN I panel Liberties Union of New Jersey v. Black was careful to state only that The Pitt News Horse Pike Regional Bd. of Educ., 84 F.3d “ ha[d] not shown a likelihood of 1471, 1476-1477 (3d Cir. 1996). Third, succeeding on the merits of its claim.” although a panel entertaining a preliminary 215 F.3d at 367 (emphasis added). Had injunction appeal generally decides only the TPN I panel gone further and taken an whether the district court abused its unequivocal position on the merits, we discretion in ruling on the request for relief would consider ourselves bound under the and generally does not go into the merits tradition expressed in IOP 9.1. But the any farther than is necessary to determine TPN I panel did not take that approach. whether the moving party established a likelihood of success, a panel is not always III. required to take this narrow approach. If a
We now turn to the question [5] preliminary injunction appeal presents a whether Section 4-498 violates The Pitt question of law “and the facts are News’ First Amendment rights. [6] We established or of no controlling relevance,” the panel may decide the merits of the claim. Thornburgh v. Am. College of [5] At the outset, we note two issues that Obstetricians & Gynecologists., 476 U.S. are not before us. First, the 747, 756 -57 (1986); see also Maldonado Commonwealth does not suggest that The v. Houston, 157 F.3d 179, 183-84 (3d Cir. Pitt News represents the Commonwealth’s 1998).
own speech as opposed to independent In the typical situation – where the student speech that the University prior panel stopped at the question of facilitates in order to foster the expression likelihood of success – the prior panel’s of a diversity of views, see Rosenberger v. legal analysis must be caref ully Rector & Visitors of Univ. of Virginia, considered, but it is not binding on the 515 U.S. 819, 833 (1995). Nor does the later panel. Indeed, particularly where Commonwealth suggest that precedents important First Amendment issues are concerning publications associated with raised, the later panel has a duty, in the schools below the college level, see, e.g., end, to exercise its own best judgment. On Hazelwood School Dist. v. Kuhlmeirer, the other hand, if the first panel does not 484 U.S. 260 (1988), have any relevance stop at the question of likelihood of here. success and instead addresses the merits, [6] The Pitt News urges us to revisit the the later panel, in accordance with our issue of its standing to assert the First conc lude that Se ction 4 -4 9 8 is speaker’s expression is a content-based unconstitutional as applied to The Pitt restriction of expression and must be News for two reasons. First, the law analyzed as such. represents an impermissible restriction on
The Supreme Court’s decision in commercial speech. Second, the law is Simon & Schuster, Inc. v. Members of the presumptively unconstitutional because it New York State Crime Victims Bd., 502 targets a narrow segment of the media, and U.S. 105 (1991), illustrates this point. the Commonwealth has not overcome this There, a career criminal named Henry Hill presumption. provided an author with the information
A.
that the author used in writing a book Although the Commonwealth about Hill’s life. Under a contract with the makes much of the fact that Section 4-498 book’s publisher, Hill was entitled to compensation, but New York’s “Son of does not prohibit The Pitt News from Sam” law required that these funds be held printing alcoholic beverage ads but simply in escrow for five years for use in prevents the paper from receiving satisfying any civil judgments obtained by payments for running such ads [7] , Section 4- the victims of Hill’s crimes. Although the 498 clearly restricts speech. The very Son of Sam law did not prohibit Hill from purpose of Section 4-498 is to discourage telling his story and did not prohibit the a form of speech (alcoholic beverage ads) publisher from publishing the book, the that the Commonwealth regards as Supreme Court held that the law placed a harmful. If government were free to content-based restriction on Hill’s speech suppress disfavored speech by preventing and that of the publisher because it potential speakers from being paid, there “impose[d] a financial disincentive only on would not be much left of the First speech of a particular content.” Id. at 116. Amendment. Imposing a financial burden Similarly, Section 4-498 imposes “a on a speaker based on the content of the financial disincentive” on certain speech by The Pitt News (alcoholic beverage ads) because would-be advertisers cannot pay
Amendment rights of its advertisers and the paper to run such ads, and readers. We find it unnecessary to reach consequently Section 4-498, like New this issue, however, because we hold that York’s Son of Sam law, must be analyzed Section 4-498 violates The Pitt News ’ own as a content-based restriction of speech. First Amendment rights. At a minimum, therefore, Section 4- [7] Indeed, the Commonwealth suggests 498 must satisfy the test for restrictions on that The Pitt News has not “suffered a First commercial speech set out in Central Amendment violation” because Section 4- Hudson Gas & Elec. Corp. v. Pub. Serv. 498 “places no restriction on what the Pitt Comm’n of New York, 447 U.S. 557 News can or cannot publish.” Appellee’s (1980). Under Central Hudson, we must Br. at 9. engage in “a four-part analysis.” Id. at New Orleans Broad. Ass’n, Inc. v. U.S., 566. First, “we must determine whether 527 U.S. 173, 188 (1999). Although the the expression is protected by the First government has considerable latitude in Amendment,” and this means that “it at the sources on which it may draw to make least must concern lawful activity and not this showing, “[t]his burden is not satisfied be misleading.” Id. Second, “we ask by mere speculation or conjecture.” whether the asserted governmental interest Edenfield v. Fane, 507 U.S. 761, 770-71 is substantial.” Id. If the first and second (1993); Lorillard Tobacco Co. v. Reilly, “inquiries yield positive answers, we must 533 U.S. 525, 555 (2001). Furthermore, it determine whether the regulation directly is not enough if a law “provides only advances the governmental interest ineffective or remote support for the asserted, and whether it is not more government’s purposes,” Edenfield, 507 extensive than is necessary to serve that U.S. at 770 (quoting Central Hudson, 447 interest.” Id. H ere, the f irst a nd U.S. at 564) or if there is “little chance” second prongs are satisfied. As noted, that the law will advance the state’s goal. Section 4-498 burdens speech. In Lorillard, 533 U.S. at 566. The Supreme addition, the law applies to ads that Court has noted that the third prong of the concern lawful activity (the lawful sale of Central Hudson test “is critical; otherwise, alcoholic beverages) and that are not ‘a State could with ease restrict misleading, and we see no other ground on commercial speech in the service of other which it could be argued that the covered objectives that could not themselves justify ads are outside the protection of the First a burden on commercial expression.’” Amendment. Rubin v. Coors Brewing Co., 514 U.S.
476, 487 (1995)(quoting Edenfield, 507 There can also be no dispute that U.S. at 771). the asserted government interests – preventing underage drinking and alcohol In this case, the Commonwealth has abuse – are, at minimum, “substantial.” not shown that Section 4-498 combats See, e.g., Lorillard Tobacco Co. v Reilly, underage or abusive drinking “to a 533 U.S. 525, 589 (2001)(opinion of material degree,” Florida Bar, 515 U.S. at Thomas, J.); Michigan Dept. of State 624, or that the law provides anything Police v. Sitz, 496 U.S. 444, 451 (1990). more than “ineffective or remote support
f or the governm ent’s purp oses.” Section 4-498 founders, however, Edenfield, 507 U.S. at 770 (quoting on the third and fourth prongs of the Central Hudson, 447 U.S. at 564). We do Central Hudson test. To satisfy the third not dispute the proposition that alcoholic prong, the government must demonstrate beverage advertising in general tends to that the challenged law “alleviate[s]” the encourage consumption, and if Section 4- cited harms “to a material degree.” Florida 498 had the effect of greatly reducing the Bar v. Went For It, Inc., 515 U.S. 618, 624 quantity of alcoholic beverage ads viewed (1995)(citation omitted); see also Greater by underage and abusive drinkers on the institutions, the Commonwealth relies on Pitt campus, we would hold that the third nothing more than “speculation” and prong of the Central Hudson test was met. “conjecture.” But Section 4-498 applies only to
Section 4-498 is also not adequately advertising in a very narrow sector of the tailored to achieve the Commonwealth’s media (i.e., media associated with asserted objectives. The fourth step of the educational institutions), and the Central Hudson test does not require Commonwealth has not pointed to any government to use the least restrictive evidence that eliminating ads in this means to achieve its goals, but it does narrow sector will do any good. Even if demand a “reasonable fit between the Pitt students do not see alcoholic beverage legislature’s ends and the means chosen to ads in The Pitt News , they will still be accomplish those ends, . . . a means exposed to a torrent of beer ads on narrowly tailored to achieve the desired television and the radio, and they will still objective.” Lorillard, 533 U.S. at 555 see alcoholic beverage ads in other (quotations omitted). Here, Section 4-498 publications, including the other free is both severely over- and under-inclusive. weekly Pittsburgh papers that are As noted, more than 67% of Pitt students displayed on campus together with The and more than 75% of the total University Pitt News . The suggestion that the population is over the legal drinking age, elimination of alcoholic beverage ads from and, in Lorillard, the Supreme Court held The Pitt News and other publications that a restriction on tobacco advertising connected with the University will slacken was not narrowly tailored in part because the demand for alcohol by Pitt students is it prevented the communication to adults counterintuitive and unsupported by any of truthful information about products that evidence that the Commonwealth has adults could lawfully purchase and use. called to our attention. Nor has the Not only does Section 4-498 suffer from Commonwealth pointed to any evidence this same defect, but the Commonwealth that the elimination of alcoholic beverage can seek to combat underage and abusive ads from The Pitt News will make it harder drinking by other means that are far more for would-be purchasers to locate places direct and that do not affect the First near campus where alcoholic beverages Amendment. The most direct way to may be purchased. Common sense combat underage and abusive drinking by suggests that would-be drinkers will have college students is the enforcement of the no difficulty finding those establishments alcoholic beverage control laws on college desp ite S ection 4-4 98, an d th e campuses. However, studies have shown Commonwealth has not pointed to any that enforcement of these laws on college contrary evidence. In contending that underage and abusive drinking will fall if alcoholic beverage ads are eliminated from just those media affiliated with educational campuses is often half-hearted [8] , and the concluding that the law would achieve its Commonwealth has not demonstrated that objective (reducing underage drinking) its law enforcement officers, at either the than there is in this case, where the state or local level, or the administrators of challenged law applies to only a narrow its colleges and universities engage in sector of the media. Similarly, in aggressive enforcement of these laws on Anheuser-Busch, there was less force to college and university campuses. the argument that the city could achieve its
goal by the alternative strategy of In arguing that Section 4-498 increasing enforcement of the laws against satisfies the Central Hudson test, the underage drinking. Because the Baltimore Co mm onw ealth relies he av ily on ordinance was designed to combat Anheuser-Busch, Inc. v. Schmoke, 63 F.3d underage drinking throughout the city, a 1305 (4 th Cir. 1995), which sustained a decision to forego the outdoor advertising Baltimore ordinance that generally ban in favor of a campaign of increased prohibited outdoor alcoholic beverage ads. enforcement would have necessitated an That decision, however, predates Lorillard, increase in enforcement over a wide area. which struck down a ban on outdoor Here, increased enforcement could target tobacco advertising, and in any event, very limited, easily identifiable areas – Baltimore’s showings in Anheuser-Busch namely, university and college campuses on the third and fourth prongs of the and surrounding neighborhoods. We thus Central Hudson test were stronger than the find Anheuser Busch to be distinguishable, Commonwealth’s are here. Because the and we hold that Section 4-498 fails the ordinance in Anheuser-Busch applied Central Hudson test. (with some exceptions) to an entire medium of communication (outdoor B. advertising), there was a firmer basis for
Section 4-498 violates the First Amendment for an additional, independent reason: it unjustifiably imposes a financial [8] See Henry Wechsler, Barbara A. burden on a particular segment of the Moe ykens, and W illiam DeJong, media, i.e., media associated with “Enforcing the Minimum Drinking Age universities and colleges. Law: A Survey of College Administrators and Security Chiefs” (2001), available at
1. http://www.edc.org/hec/pubs/enforce.htm. This study, conducted by the Harvard The Supreme Court recognized School of Public Health and published by long ago that laws that impose special the U.S. Department of Education’s financial burdens on the media or a narrow Higher Education Center, concluded that sector of the media present a threat to the “a detailed examination of how rules First Amendment. In Grosjean v. Am. against underage drinking are currently Press Co., 297 U.S. 233 (1936), Louisiana enforced reveals a widespread laxity.” had imposed a special 2% gross receipts tax on newspapers with circulations of consumed more than $100,000 worth of more than 20,000. The Court noted that paper and ink in a year. This tax, like the the form of the tax made it plain that its one in Grosjean, had the effect of favoring purpose was to penalize and curtail the small newspapers over large ones, but the circulation of “a select group of Court did not suggest that the Minnesota newspapers,” namely, as the Court later legislature had passed the challenged law pointed out, the state’s large papers, which in order to retaliate for anything that the had attacked Governor Huey Long. See covered papers had said in the past or to Minneapolis Star & Tribune Co. v. influence anything that they might publish Minnesota Comm’r of Revenue, 460 U.S. in the future. See id. at 592. Rather, the 575, 579-80 (1983). Holding this tax Court held that, regardless of the unconstitutional, the Court wrote: legislature’s motives, the state was
required to show that the disparate The tax here involved is bad treatment of large and small papers was not because it takes money needed to serve a compelling state interest, from the pockets of the id. at 585, and the Court concluded that the appellees. If that were all, a state had not satisfied this test, id. at 586- wholly different question 92. The Court observed: would be in presented. It is bad because, in the light Whatever the motive of the of its history and of its legislature in this case, we present setting, it is seen to think that recognizing a b e a d e l ib e r a t e a n d power in the State not only calculated device in the to single out the press but guise of a tax to limit the also to tailor the tax so that circulation of information to it singles out a few members which the public is entitled of the press presents such a i n v i r t u e o f t h e potential for abuse that no constitutional guaranties. A i n t e r e s t s u g g este d b y free press stands as one of Minnesota can justify the t h e gre at i n t e rp r e t e rs scheme. between the government and
Id. at 591-92. the people. To allow it to be f e t te r e d i s t o f e t t e r In Arkansas Writers’ Project, Inc. v. ourselves. Ragland, 481 U.S. 221 (1987), the Court
considered a feature of Arkansas’s gross Grosjean, 297 U.S. at 250. receipts tax. Under the Arkansas scheme, In Minneapolis Star, the Court general interest magazines were subject to struck down a state law that required the tax but religious, professional, trade, publications to pay a use tax if they and sports journals were exempt. Id. at 221, 226. Noting that the Arkansas 2. scheme drew distinctions between
Under the above cases, laws that publications based on content, the Court impose financial burdens on a broad class applied strict scrutiny and held that the of entities, including the media, do not scheme was unconstitutional. Id. at 231- violate the First Amendment. “It is 32. beyond dispute that the States and the By contrast, in Leathers v. Federal Government can subject [the media] to generally applicable economic Medlock, 499 U.S. 439 (1991), the Court rejected the argument that the Arkansas regulations without creating constitutional scheme violated the First Amendment by problems.” Minneapolis Star, 460 U.S. at 581. A business in the communications exempting newspapers but not cable television. The Court noted that the field cannot escape its obligation to Arkansas tax was “a tax of general comply with generally applicable laws on the ground that the cost of compliance applicability” that applied to “receipts from the sale of all tangible personal would be prohibitive. As TPN I put it, “a property and a broad range of services.” newspaper does [not have] a constitutional Id. at 447. The Court further observed that right to a certain level of profitability, or “[t]he tax does not single out the press and even to stay in business at all.” TPN I, 215 F.3d at 366. does not therefore threaten to hinder the press as a watchdog of government
At the same time, however, courts activity.” Id. Stating that “there [was] no must be wary that taxes, regulatory laws, indication that Arkansas ha[d] targeted and other laws that impose financial cable television in a purposeful attempt to burdens are not used to undermine interfere with its First Amendment freedom of the press and freedom of activities,” the Court continued: “Nor is speech. Government can attempt to cow the tax one that is structured so as to raise the media in general by singling it out for suspicion that it was intended to do so.” special financial burdens. Government Id. at 448. “Unlike the taxes involved in can also seek to control, weaken, or Grosjean and Minneapolis Star,” the Court destroy a disfavored segment of the media wrote, the Arkansas tax did not “select[] a by targeting that segment. Speaking of narrow group to bear fully the burden of the difference be tween genera lly the tax.” Id. In addition, the Court stated applicable tax laws and tax laws that target that the feature of the Arkansas scheme the media or a segment of the media, the that was then at issue was “structurally Supreme Court has explained: dissimilar” to the feature challenged in A p o w e r t o t a x Arkansas Writers’, where “only ‘a few’ Arkansas magazines paid the State’s sales differentially, as opposed to tax.” Id. a power to tax generally,
gives a government a powerful weapon against the unconstitutional if it is “structured so as to taxpayer selected. When the raise suspicion that it was intended to State imposes a generally [interfere with protected expression].” applicable tax, there is little Leathers, 499 U.S. at 448. Once the cause for concern. We need presumption of unconstitutionality arises, not fear that a government it can be overcome only by showing that will destroy a selected group the challenged law is needed to serve a of taxpayers by burdensome compelling interest. Minneapolis Star, 460 taxation if it must impose U.S. at 582, 585. the same burden on the rest 3. of its constituency. . . .
Applying these standards, we hold When the State singles out that Section 4-498 violates the First the press, though, the Amendment. To begin, the Act’s structure political constraints that makes it presumptively unconstitutional. prevent a legislature from Like the provisions struck down in passing crippling taxes of Grosjean, Minneapolis Star, and Arkansas general applicability are Writers’, Section 4-498 singles out a weakened, and the threat of relatively “small group” of speakers. burdensome taxes becomes Leathers, 499 U.S. at 447. By its terms, acute. That threat can Section 4-498 is limited to media affiliated operate as effectively as a with educational institutions, and in censor to check critical practice the scope of the Act is comment by the press . . . . undoubtedly even narrower. Because Minneapolis Star, 460 U.S. at 585. newspapers and other media affiliated with elementary and secondary schools are most To prevent such abuse, laws that unlikely to seek to run alcoholic beverage impose special financial burdens on the ads, Section 4-498 in practice singles out media or a segment of the media must be m e d i a a s s o c i a t e d w i t h t h e caref ully exami ne d. A l aw is Com mon wealth’s unive r sitie s and presumptively invalid if it “single[s] out colleges. Accordingly, the structure of the press” or “a small group of speakers.” Section 4-498 triggers the presumption of Leathers, 499 U.S. at 447. This unconstitutionality and thus requires the presumption is not limited to instances in Commonwealth to show that the Act is which there is evidence that the law “necessary” to achieve what the Court has represents a “purposeful attempt to described as “an overriding government interfere with . . . First Amendment interest” and an “interest of compelling activities.” Id. at 448. Even “where . . . importance.” Minneapolis Star, 460 U.S. there is no evidence of an improper at 582, 585. censorial motive,” Arkansas Writers’, 481 U.S. at 228, a law is presumptively The Commonwealth has not discharged that obligation. For the reasons financial burdens that may have the effect already discussed, the Commonwealth has of influencing or suppressing speech, and not shown that Section 4-498 is whether those burdens take the form of “necessary” to discourage underage taxes or some other form is unimportant. drinking or abusive drinking. The
The Commonwealth also suggests Commonwealth has not demonstrated that that the tax cases are inapplicable here Section 4-498 has curbed or promises to because the laws struck down in those curb such drinking to any appreciable cases imposed financial burdens directly degree. Nor has the Commonwealth on the media, whereas Section 4-498, as shown that its worthy objectives cannot be interpreted by the LCB, is directly served at least as well by other means, applicable only to advertisers. We reject such as the diligent enforcement of the this argument as well. Much like the alcoholic beverage laws on and around proffered distinction between taxes and college campuses. other financial burdens, this argument The Commonwealth contends that disregards the reason for the presumptive cases such as Grosjean, Minneapolis Star, unconstitutionality of laws that impose and Arkansas Writers’ are inapposite disparate financial burdens on the media or because they concerned laws that required segments of the media. As noted, such publications to pay taxes, rather than laws schemes are suspect because they can that deprived the publications of a source easily be used as a way of controlling or of revenue, but this difference is suppressing speech. Because a law that insignificant for present purposes. In imposes a significant, but indirect, Simon & Schuster, the state noted that the financial burden on the media or a segment Son of Sam law simply required that the of the media can be used in the same way funds in question be held in escrow for and with the same effect, there is no five years, and the state argued that the principled reason to draw a distinction Son of Sam law was therefore quite between laws that impose direct and different from a tax law , which indirect burdens of comparable practical significance. [9] permanently deprives the taxpayer of the money paid. See 502 U.S. at 116-17. Rejecting this contention, the Court wrote
As did the TPN I panel, the law was part of the state’s overall effort to Commonwealth relies on AM SAT Cable combat monopolies and there was nothing Ltd. v. Cablevision of Connecticut, 6 F.3d about the structure of the law at issue in 867 (2d Cir. 1993), and Warner that case that gave rise to a presumption of Communications, Inc. v. City of Niceville, unconstitutionality. As stated above, 911 F.2d 634 (11 th Cir. 1990), but neither media are not exempt from generally case supports the Commonwealth’s applicable laws or schemes simply because position here. In AMSAT, a satellite they harm the media’s profit. Minneapolis television company that had an exclusive Star, 460 U.S. at 581. Section 4-498, agreement with some apartment buildings however, is specific to certain media to provide television service to their content and specifically targets certain tenants challenged a state law that required types of media. It is not part of a generally apartment building owners to give access applicable scheme. to cable and antenna companies that
The Eleventh Circuit’s decision in wanted to service the tenants. The satellite City of Niceville is even farther afield. company argued that the state anti-trust There, Warner, a leading cable provider, law was unconstitutional because it would claimed that the city’s entry into the undermine the economic viability of market as a competing cable provider satellite companies. Id. at 871. Rejecting violated Warner’s First Amendment rights. this argument, the Second Circuit held that The Eleventh Circuit rejected W arner’s the satellite company had no First claim, holding that the city was entitled to Amendment right to an exemption from enter the market and that Warner had no the law simply because such a law would First Amendment right to be free from harm the company’s revenue. In AMSAT, competition. Id. at 637-638. The there was no evidence that it was a argument that the Court rejected in City of targeted attempt to suppress speech, rather Niceville – that the First Amendment than a generally applicable anti-trust protec ts a med ia comp any from scheme. Id. com petition by a state -sponsore d AMSAT plainly differs from the enterprise – simply has no relevance in the present case in several respects. As far as present case. Here, the Commonwealth is the AMSAT opinion reveals, the satellite not damaging The Pitt News by sponsoring
a competing publication; it is damaging The Pitt News by preventing it, and a small (1996)(“[W ]e now hold that the group of similarly situated media, from Twenty-first Amendment does not qualify generating revenue from ads of specific the constitutional prohibition against laws content. While there was no indication of abridging the freedom of speech embodied intent to suppress speech or harm specific in the First Amendment.”) media in City of Niceville, these elements
do exist in our case.
IV.
For these reasons, we hold that Section 4-498 violates the First Amendment as applied to The Pitt News . We therefore reverse the order of the District Court and remand for the entry of a permanent injunction against the enforcement of Section 4-498 with respect to any advertisements in that paper.
NOTES
[2] The Pitt News submitted the stated that, in the LCB’s view, Section 4- 498 contains two restrictions that are not deposition of Stanley Woloski, an employee of the Office of the Chief expressly set out in the statute. First, Diehl testified that Section 4-498 is enforceable Counsel of the Pennsylvania State Police only against advertisers and not against the who is assigned to the Bureau of Liquor Control Enforcement (BLCE), which media. Second, according to Diehl, Section 4-498 applies only when the media stated that, while Woloski did not receives some form of payment for an “wholeheartedly agree” with Diehl’s interpretation of the statute, the BLCE was bound by the LCB’s interpretation.
[9] We also note that while the Twenty- that “[b]oth forms of financial burden First Amendment provides the States with operate as disincentives to speak.” Id. at 117. Thus, the Supreme Court’s cases the authority to regulate alcohol, such concerning disparate taxation of the media regulation is subject “to the same First Amendment restrictions that apply to the or of a segment of the media apply to other laws that impose other types of disparate Federal Government.” Rubin v. Coors financial burdens. The threat to the First Brewing Co., 514 U.S. 476, 485-86 (1995); see also 44 Liquormart, Inc. v. Amendment arises from the imposition of Rhode Island, 517 U.S. 484, 516-17
