Time, Inc. v. Regan

• Decision Date: 04 June 1982
• Docket Number: No. 81 Civ. 3218 (VLB).,81 Civ. 3218 (VLB).
• Citation: 539 F. Supp. 1371
• Parties: TIME, INC., Plaintiff, v. Donald T. REGAN, Secretary of the Treasury, H. Stuart Knight, Director, United States Secret Service, William French Smith, Attorney General of the United States; James R. D'Amelio, Special Agent in Charge, New York Field Office, United States Secret Service, John S. Martin, Jr., United States Attorney for the Southern District of New York, Defendants.
• Court: U.S. District Court — Southern District of New York

539 F. Supp. 1371

TIME, INC., Plaintiff, v. Donald T. REGAN, Secretary of the Treasury, H. Stuart Knight, Director, United States Secret Service, William French Smith, Attorney General of the United States; James R. D'Amelio, Special Agent in Charge, New York Field Office, United States Secret Service, John S. Martin, Jr., United States Attorney for the Southern District of New York, Defendants.

No. 81 Civ. 3218 (VLB).

United States District Court, S. D. New York.

June 4, 1982.

Cravath, Swaine & Moore by Frederick A. O. Schwarz, Jr., New York City, for plaintiff.

John S. Martin, Jr., U. S. Atty., S. D. N. Y., New York City, for defendants.

OPINION

VINCENT L. BRODERICK, District Judge.

This civil action, in which plaintiff seeks declaratory and injunctive relief, involves a challenge to the constitutionality of two provisions of the federal anti-counterfeiting laws that either prohibit or regulate the publication or production of any likeness of United States currency. Jurisdiction of this court rests on 28 U.S.C. § 1331, as amended Dec. 1, 1980, Pub.L. 96-486, § 2(a), 94 Stat. 2369. Declaratory relief is sought under 28 U.S.C. §§ 2201 and 2202 (1976).¹

Plaintiff Time Inc. ("Time") is a New York corporation with its principal place of business in New York City. It publishes various periodicals—Time, Fortune, Sports Illustrated, Life, Money, People, and Discover.² Defendants are various United States Government officials who are statutorily charged with the administration and enforcement of the counterfeiting laws of the United States.³

Plaintiff alleges that the challenged provisions are overbroad and void for vagueness, and that they impermissibly infringe upon plaintiff's First Amendment rights of freedom of speech and of the press.⁴ Plaintiff has moved and defendants have crossmoved for summary judgment. Fed.R. Civ.P. 56.

II.

The United States Constitution grants Congress broad power to legislate to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures," art. I, § 8, cl. 5, and to "provide for the Punishment of counterfeiting the Securities and current Coin of the United States." Art. I, § 8, cl. 6. The power to coin money has been long recognized as carrying the correlative power to protect it. United States v. Marigold, 50 U.S. 560, 9 How. 560, 13 L.Ed. 257 (1850). The Marigold Court upheld an Act of Congress, 4 Stat. at Large 121, ch. 65, providing for the prosecution of those involved in counterfeiting any coin in the resemblance of United States currency.

Chapter 25 of Title 18 of the United States Code contains those laws which prohibit the alteration, counterfeiting or forgery of the coins, obligations and securities of the United States Government and of foreign governments, and which provide criminal sanctions with respect to such activities.

This case involves the impact of two of the provisions of Chapter 25—the sixth paragraph of § 474, and § 504.

1. 18 U.S.C. § 474.

18 U.S.C. § 474 (1976) is one of 39 sections in Chapter 25, and is captioned "Plates or stones for counterfeiting obligations or securities."⁵ Paragraphs one through five and paragraph seven of § 474 criminalize the possession, use, importation, sale and forgery of materials which can actually be used for counterfeiting purposes, such as plates, stones and paper. The sixth paragraph of § 474, one of the provisions challenged herein, makes it a crime to create a photograph, print or impression of "any obligation or other security made or executed, in whole or in part, after the similitude of any obligation or other security issued under the authority of the United States":

* * * * * *

Whoever prints, photographs, or in any other manner makes or executes any engraving, photograph, print, or impression in the likeness of any such obligation or other security,⁶ or any part thereof, or sells any such engraving, photograph, print, or impression, except to the United States, or brings into the United States, any such engraving, photograph, print, or impression, except by direction of some proper officer of the United States;

* * * * * *

Shall be fined not more than $5,000 or imprisoned not more than fifteen years, or both.

18 U.S.C. § 474 ¶ 6.

Section 474 traces its roots to Section 11 of "An Act to provide Ways and Means for the Support of the Government, and for other Purposes," ch. 172, 13 Stat. 218, 221-222, which was enacted on June 30, 1864.

Drafted as a measure to raise money for the War Between the States, the Act provided, inter alia, for the issuance of various federal obligations, and it set forth penal provisions with respect to the counterfeiting and forgery of federal obligations. Thus Section 10 of the Act provided criminal sanctions against the forgery, counterfeiting or alteration of United States obligations and the passing or uttering of counterfeits. Section 12 made it a federal crime to possess without lawful authorization "any engraved or transferred plate, block, or electrotype" from which U. S. obligations were or would be made; or any die, roll, or original work used in the making thereof; or any materials made "after the similitude" thereof.

Section 11 of the 1864 Act is the ancestor of Section 474. The sixth paragraph of Section 474 traces its genesis to the following language of Section 11:

... if any person shall print, photograph, or in any other manner make or execute, or cause to be printed, photographed, or in any manner made or executed, or shall aid in printing, photographing, making, or executing any engraving, photograph, or other print or impression in the likeness or similitude of any obligation or other security, or any part or parts thereof, or shall vend or sell any such engraving, photograph, print, or other impression, except to the United States, or shall bring into the United States from any foreign place any such engraving, photograph, print, or other impression, except by the direction of some proper officer of the United States ... every person so offending shall be deemed guilty of a felony, and shall, on conviction thereof, be punished by fine not exceeding five thousand dollars, or by imprisonment and confinement at hard labor, not exceeding fifteen years, or by both, in the discretion of the court.

The proceedings of the 38th Congress shed virtually no light on its intent with respect to the anti-counterfeiting sections of the 1864 Act. The sole reference to § 11 in the course of the House pre-enactment consideration of the Act pertained to a modification of the sentence and fine provisions, which was made. There was apparently no significant discussion of § 11 in the Senate.

But Section 11 of the statute passed in 1864 to help finance the Union in the War Between the States is, in substance, the law of the United States today. With minor changes in language, it was re-enacted as § 5430 of the Revised Statutes of 1878, Tit. LXX, ch. 5, Rev.Stat. 1052 (December 1, 1878), and re-enacted again as § 150 of the codification of 1909, ch. 321, 35 Stat. 1116 (March 4, 1909). As revised in 1909, the substance of Section 11 made its way through the first three editions of the United States Code; it was re-enacted once again with minor changes in phraseology in the 1946 recodification of the penal laws, see ch. 645, 62 Stat. 706 (1948), and appears in that form in Section 474 of Title 18.

2. 18 U.S.C. § 504.

18 U.S.C. § 504 (1976), which is the second provision challenged in this action, was substantially amended in 1958 to provide certain statutory exemptions to the flat ban of § 474. Notwithstanding the prohibitions contained in the sixth paragraph of § 474, § 504 permits the printing or publishing "of illustrations" of United States currency "for philatelic, numismatic, educational, historical, or newsworthy purposes in articles, books, journals, newspapers or albums." Such illustrations must be "in black and white", and they must be "of a size less than three-fourths or more than one and one-half, in linear dimension," of the currency illustrated. Excepted from these requirements are motion-picture films, microfilms or slides for screen projection or telecasting.⁷

The legislative history indicates that Congress intended in § 504 merely to institutionalize the practices of the Treasury Department:

The Secretary of the Treasury, under the authority vested in him by title 18, United States Code, section 474, has normally as a matter of practice for many years made exceptions to the statute by granting special permission to use illustrations of United States bonds and paper money for numismatic, historical, and educational purposes. To prevent any possibility of the illustrations being used as an instrument of fraud, such special permission has been limited to the use of black-and-white illustrations less than three-fourths or more than 1½ times the size of the genuine paper money.

It is the opinion of the Treasury Department that the printing in publications of black-and-white illustrations of paper money and other obligations and securities of the United States restricted in size will not facilitate counterfeiting. Paragraph (1) of section 504 of the United States Code, as it would be amended by the bill, will specifically permit such illustrations for numismatic, educational, historical, and newsworthy purposes and will obviate the necessity of obtaining special permission from the Secretary of the Treasury in each case where the use of such illustrations is desired. A provision is included to require that the negatives and plates used in making the illustrations shall be destroyed after their final use for the purpose for which they were made. Such a requirement has formerly been imposed in cases where the Secretary of the Treasury has granted special permission as a precautionary measure and to avoid investigations of alleged violation where plates and negatives were legitimately made but were merely discarded

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