Lebron v. National R.R. Passenger Corp. (Amtrak)
| Decision Date | 27 December 1993 |
| Docket Number | D,No. 1494,1494 |
| Parties | Michael A. LEBRON, Plaintiff-Counter-Defendant-Appellee, v. NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK), Defendant-Appellant, Transportation Displays, Incorporated, Defendant-Counter-Claimant. ocket 93-7127. |
| Court | U.S. Court of Appeals — Second Circuit |
Kevin T. Baine, Washington, DC (Nicole K. Seligman, Steven M. Farina, Williams & Connolly, Washington, DC, William G. Ballaine, Mark S. Landman, Siff Rosen P.C., New York City, of counsel), for defendant-appellant.
David D. Cole, Washington, DC (Center for Constitutional Rights, Washington, DC, R. Bruce Rich, Gloria C. Phares, Robin E. Silverman, Bernadette M. McCann Ezring, Jonathan Bloom, Weil, Gotshal & Manges, New York City, of counsel), for plaintiff-counter-defendant-appellee.
Before: LUMBARD, NEWMAN, * and MAHONEY, Circuit Judges.
Defendant-appellant National Railroad Passenger Corporation (Amtrak) ("Amtrak") appeals from a judgment entered February 11, 1993 in the United States District Court for the Southern District of New York, Pierre N. Leval, then-District Judge. ** The judgment of the district court enjoined Amtrak and an advertising agency that performs services for Amtrak, defendant-counterclaimant Transportation Displays, Incorporated ("TDI"), to display a political advertisement prepared by plaintiff-counter-defendant-appellee Michael A. Lebron on a large billboard known as the Spectacular in New York City's Pennsylvania Station ("Penn Station"). Lebron had entered into a contract with TDI to lease the Spectacular for January and February 1993.
The district court ruled that because of the pervasive involvement of the federal government in Amtrak's structure and operations, Amtrak's conduct in controlling speech on its billboards must be deemed governmental rather than private, in nature, and that Amtrak had violated the First Amendment by refusing to display Lebron's advertisement. Lebron v. National R.R. Passenger Corp. (Amtrak), 811 F.Supp. 993 (S.D.N.Y.1993).
We conclude that Amtrak is not a governmental actor subject to the strictures of the First Amendment, and accordingly reverse.
In August 1991, Lebron, an artist who creates billboard displays (frequently involving commentary on public issues), first contacted TDI, which manages the leasing of many of Amtrak's billboards, about contracting for billboard space in Penn Station. The Spectacular, a curved back-lit display space approximately 103 feet wide by ten feet high, dominates the west wall of the rotunda on the upper level of Penn Station where thousands of passengers pass each day. Lebron and TDI eventually agreed that Lebron would pay $16,500 per month to rent the Spectacular for January and February 1993. On November 30, 1992, Lebron and TDI signed an agreement (the "Lease") to that effect.
In negotiating the Lease, Lebron dealt primarily with William B. Schwartz, a TDI account executive, who informed Lebron that displays for the Spectacular containing obscenity or violence were unacceptable. Schwartz asked Lebron about the content of the advertisement that Lebron intended for the Spectacular, but Lebron declined to disclose it, explaining that while his work was generally political, he wanted to keep the specific nature of his advertisement for the Spectacular confidential prior to its display. Schwartz did not then suggest that there might be a problem with political advertisements on the Spectacular.
Although Amtrak authorized TDI to manage the leasing of Amtrak's billboard space, Amtrak at all times retained the right to approve or reject all advertising copy that would appear on its billboards. (In practice, Amtrak only reviewed displays that were to appear on the Spectacular.) Thus, the Lease contained the following language:
All advertising copy is subject to approval of TDI and [Amtrak] as to character, text, illustration, design and operation.
....
If for any cause beyond its control TDI shall cease to have the right to continue the advertising covered by this contract, or if [Amtrak] should deem such advertising objectionable for any reason, TDI shall have the right to terminate the contract and discontinue the service without notice.
On December 2, 1992, Lebron submitted a color photocopy of the work he intended to display on the Spectacular to TDI, which TDI promptly forwarded to Amtrak. Lebron characterizes the advertisement as "an allegory about the destructive influence of a powerful, urban, materialistic and individualistic culture on rural, community based, family-oriented and religious cultures." The district court described it as follows:
The work is a photomontage, accompanied by considerable text. Taking off on a widely circulated Coors beer advertisement which proclaims Coors to be the "Right Beer," Lebron's piece is captioned "Is it the Right's Beer Now?" It includes photographic images of convivial drinkers of Coors beer, juxtaposed with a Nicaraguan village scene in which peasants are menaced by a can of Coors that hurtles towards them, leaving behind a tail of fire, as if it were a missile. The accompanying text, appearing on either end of the montage, criticizes the Coors family for its support of right-wing causes, particularly the contras in Nicaragua. Again taking off on Coors' advertising which uses the slogan of "Silver Bullet" for its beer cans, the text proclaims that Coors is "The Silver Bullet that aims The Far Right's political agenda at the heart of America."
Anthony DeAngelo, Amtrak's vice president for real estate and operations development, viewed the photocopy and disapproved the display of Lebron's advertisement on the Spectacular. In a letter dated December 23, 1992, Amtrak notified TDI of its rejection, stating that "Amtrak's policy is that it will not allow political advertising on the [S]pectacualar advertising sign."
Lebron then commenced this action against Amtrak and TDI, claiming violations of his First and Fifth Amendment rights as well as his contractual rights under the Lease. He sought equitable relief to compel Amtrak and TDI to display his ad on the Spectacular, or alternatively, damages for breach of the Lease. After expedited discovery and a trial on documentary submissions, the district court ruled that "in rejecting [Lebron's] contract to display his art on its billboard Amtrak was engaged in governmental action and ... the standards employed by Amtrak in rejecting his work violated its obligations under the First Amendment." 811 F.Supp. at 1005. In view of this conclusion, the district court did not reach Lebron's contractual claim. Id. at 1005 n. 5. Judgment was entered enjoining Amtrak and TDI to display Lebron's advertisement on the Spectacular "for two months beginning on the date that follows by six (6) business days the denial or expiration of any stay of [the district court's] judgment by the highest court having jurisdiction to issue such a stay."
Amtrak applied to the district court for a stay of its judgment pending appeal to this court. The district court denied the application, but "permit[ted] delay in compliance with the judgment" for fourteen days to allow an application for a stay to this court, while recommending against the grant of any such application.
This appeal followed. In response to a motion by Amtrak, this court stayed the execution of the district court's judgment pending appeal and expedited the appeal.
The First Amendment's directive "[t]hat 'Congress shall make no law ... abridging the freedom of speech, or of the press' is a restraint on government action, not that of private persons." Columbia Broadcasting Sys. v. Democratic Nat'l Comm., 412 U.S. 94, 114, 93 S.Ct. 2080, 2092, 36 L.Ed.2d 772 (1973) (plurality opinion) (citing Public Utilities Comm'n v. Pollak, 343 U.S. 451, 461, 72 S.Ct. 813, 820, 96 L.Ed. 1068 (1952)). Thus, in considering Lebron's claim that Amtrak violated his right to free speech, the threshold inquiry is whether Amtrak's refusal to run Lebron's advertisement on the Spectacular constitutes government action.
Government action is most readily found when the conduct at issue is performed by a government entity. However, that is not the case here. The Rail Passenger Service Act of 1970 (the "Act"), 45 U.S.C. Sec. 501 (1988) et seq., created Amtrak as a private, for-profit corporation under the District of Columbia Business Corporation Act. See 45 U.S.C. Sec. 541 (1988). This legislation rejected earlier suggestions that the nation's passenger rail service be nationalized. See Laurence E. Tobey, Costs, Benefits, and the Future of Amtrak, 15 Transp.L.J. 245, 252-53 (1987). Accordingly, the Act specifies that Amtrak is "not ... an agency, instrumentality, authority, or entity, or establishment of the United States Government." Sec. 541; see also National R.R. Passenger Corp. v. Atchison T. & S.F. Ry. Co., 470 U.S. 451, 454-55, 105 S.Ct. 1441, 1445-46, 84 L.Ed.2d 432 (1985).
The government action inquiry is more difficult when the challenged conduct is performed not by the government itself, but by a private entity. The Supreme Court has articulated a variety of approaches for discerning the presence of government action in the activities of private entities. See Blum v. Yaretsky, 457 U.S. 991, 1004, 102 S.Ct. 2777, 2786, 73 L.Ed.2d 534 (1982) (); Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 158-59, 98 S.Ct. 1729, 1734-35, 56 L.Ed.2d 185 (1978) (); Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 453, 42 L.Ed.2d 477 (1974) (...
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