Overseas Media Corporation v. McNamara, 20590.

• Decision Date: 03 October 1967
• Docket Number: No. 20590.,20590.
• Citation: 128 US App. DC 48,385 F.2d 308
• Parties: OVERSEAS MEDIA CORPORATION et al., Appellants, v. Robert S. McNAMARA, Secretary of Defense, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

128 US App. DC 48, 385 F.2d 308 (1967)

OVERSEAS MEDIA CORPORATION et al., Appellants, v. Robert S. McNAMARA, Secretary of Defense, Appellee.

No. 20590.

United States Court of Appeals District of Columbia Circuit.

Argued April 3, 1967.

Decided October 3, 1967.

Mrs. Betty Southard Murphy, Washington, D. C., with whom Mr. Warren Woods, Washington, D. C., was on the brief, for appellants.

Mr. John C. Eldridge, Atty., Dept. of Justice, with whom Messrs. David G. Bress, U. S. Atty., and Alan S. Rosenthal, Atty., Dept. of Justice, were on the brief, for appellee, Mr. Harvey L. Zuckman, Atty., Dept. of Justice, also entered an appearance for appellee.

Mr. Lawrence Speiser, Washington, D. C., filed a brief on behalf of American Civil Liberties, as amicus curiae, urging reversal.

Before FAHY,^* McGOWAN and TAMM, Circuit Judges.

McGOWAN, Circuit Judge:

Appellants filed in the District Court an action for injunction and declaratory relief, requesting that certain actions and alleged failures to act on the part of appellee, the Secretary of Defense, be declared invalid on constitutional and other grounds. Specifically, the court was asked to order the Secretary to reverse a decision of the Department of Defense denying to appellants the use of certain newsstand facilities of military post exchanges in the Far East for the purpose of selling their newspapers. Appellants also sought a preliminary injunction. Appellee moved for dismissal of the complaint or, in the alternative, for summary judgment. After hearing argument, the trial judge granted the latter; and this appeal followed. We reverse because we think the complaint tendered factual issues giving rise to a legally justiciable question, and that summary judgment was inappropriate in its foreclosure of consideration of the merits of appellants' allegations.

I

The facts as recited hereinafter are founded upon allegations in the complaint and in various supporting documents and affidavits. Appellants are a publishing corporation and its chief executive officers. For the past sixteen years, Overseas Media Corporation has published in Europe Overseas Weekly and a companion weekly, Overseas Family. The readership of the papers has primarily been drawn from the ranks of American non-commissioned service personnel and their families. Overseas Weekly styles itself as "the acknowledged champion of the American G. I." and, as such, claims to have performed important services of the kind traditionally associated with the vigorous reporting of facts of public interest and concern which might otherwise have remained unrevealed.¹

The weekly editions of the two papers have been distributed in Europe by Stars and Stripes, a military paper familiar to most servicemen, which holds concession rights for post exchange newsstands operated by the Army and Air Forces' European Exchange Service, and which receives a substantial commission for its services. With American activity in the Far East increasing dramatically in 1965, the distribution balance of servicemen began to shift, with more and more troops arriving in Viet Nam and smaller yet significant numbers departing from Europe for the former destination. That trend has not as yet reversed itself. In light of this shift, and because Overseas Weekly had "received numerous letters from individual servicemen and company commanders and officers in the field requesting distribution of Overseas Weekly in Viet Nam and the Pacific area," appellants decided to publish a Far East edition of this newspaper and to seek distribution facilities throughout the area.²

There appear to be three methods by which newspapers and periodicals are purchased for military newsstands in the Far East.³ Some post exchanges actively manage their own newsstands, and place orders through the Army-Air Force Exchange in New York for those publications they desire. Other exchanges, while retaining the right to designate which publications are to be ordered, contract with Stars and Stripes to manage the newsstands. Finally, some local exchanges contract with privately owned distributing companies. Under this latter arrangement, the private company purchases the newspapers and periodical and delivers them to the exchange newsstands. Star Distributing Company of Okinawa, which publishes a weekly newspaper in competition with Overseas Weekly, performs this function in South Viet Nam.⁴ Star has been subsidized by the United States Government to the extent that its trans-Pacific shipping requirements are supplied by the Government.

Appellants decided to print a Far East edition of their paper in Hong Kong, or other similarly situated Asia city, and to send each weekly edition by commercial air freight to post exchange distribution centers throughout the area. To further this objective, they wrote, in March, 1965, to the Far East Exchange Service in Yokahama, Japan, seeking instructions on the approved procedure for obtaining rights to use military newsstands. For some months this request was channelled through a number of regional exchange offices. Finally, in August, 1965, the President of Star Distributing Company informed Overseas Media that, because of space limitations, "we do not wish to handle these publications on our newsstands" in Viet Nam.⁵

After further contacts with service exchange personnel had proven fruitless, appellants approached Mr. John C. Broger, Directorate of Armed Forces Information and Education, Office of the Secretary of Defense (Manpower). In sworn affidavits in the district court, appellants alleged that "we asked Mr. Broger what were the criteria or the formula for getting approval for distribution in the Far East through the Exchange System. He said, in effect, there were no criteria, but he would attempt to set up a committee to devise a formula which would enable publishers to learn how to go about getting approval." This was not done; and appellants next arranged a conference with Mr. Thomas D. Morris, Assistant Secretary of Defense (Manpower), who affirmed that "there were no established criteria for obtaining distribution rights in the Far East and said he preferred to leave such decisions to the Post Exchanges themselves. He added, however, that if inaction on their part was tantamount to commercial discrimination or unfairness, he would intervene." On the advice of the Defense Department, appellants reapplied for distribution rights through the same channels they had previously attempted, only to be met again with similar rebuffs. Appellants further alleged, by way of affidavit in the district court, that over 30 additional publications were granted access to military newsstands in the Far East after Overseas Weekly was denied such access.

In view of their complete failure to win approval for Exchange distribution, and acting on a suggestion of the Defense Department, appellants next attempted to ascertain the feasibility of selling Overseas Weekly without benefit of competitive access to the military newstands. A special Far East edition of the paper was replated in Frankfurt and commercially airlifted to Saigon. Copies were hawked on the streets of the city, and the entire edition was soon sold out. Encouraged by this success, appellants asked the Defense Department, through Assistant Secretary Morris, to furnish them a "no objection letter," assertedly a sine qua non of the publication and distribution of newspapers in certain Far Eastern countries, without falling afoul of the ban or interference of the foreign governments involved. This request, together with a renewed request for Exchange distribution rights, was denied by Secretary Morris in a letter dated May 17, 1966. The pertinent paragraphs in that letter are these:

I have personally looked into this matter further with the Commander in Chief, Pacific, and his component commanders. I have also inspected Exchange facilities at a number of locations in South Vietnam and examined the range of publications and merchandise of all kinds carried by them. Based upon these discussions and examinations, I have concluded that it would not be advisable at this time to use military facilities for the distribution of your newspaper.

First, we have found that there is already a balanced selection of printed material being provided for sale. The Pacific Exchanges are supplied with both daily and weekly news publications, such as Pacific Stars and Stripes, and Pacific editions of Time and Newsweek magazines. Most installations also have their own newspapers. Moreover, local civilian newspapers and other local publications are usually available through Exchanges or on-base newsstands. Widespread use is made of daily news sheets compiled from material originating with the news wire services.

Second, we have verified the reports of the military commanders that only a selected list of publications can be distributed due to space limitations, and that our present distribution facilities have reached the point of saturation.

Thirdly, as pointed out by the Commander in Vietnam, "In consideration of the saturated condition of the aerial distribution system in-country, there appears to be no justification for changing or expanding the list of representative publications now on order by the Army-Air Force Exchange Service."

I have verified that the factors stated above have been applied in considering the products of other entrepreneurs. In fact, over 1,000 items have been deleted from the Vietnam Post Exchange inventory since December.

You stated that in order to engage in the distribution of your newspaper in the Saigon area without use of military facilities it would be necessary for this Department to provide you a letter expressing "no objection" before permission could be obtained from the Vietnamese authorities. Our reply was that we must maintain a policy of complete neutrality, since to set a precedent for one private entrepreneur would open the door for many such other

...