Am. Future Systems, Inc. v. Pa. State University, Civ. No. 78-262.

• Decision Date: 02 February 1979
• Docket Number: Civ. No. 78-262.
• Citation: 464 F. Supp. 1252
• Parties: AMERICAN FUTURE SYSTEMS, INC., Plaintiff, v. The PENNSYLVANIA STATE UNIVERSITY et al., Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

464 F. Supp. 1252

AMERICAN FUTURE SYSTEMS, INC., Plaintiff, v. The PENNSYLVANIA STATE UNIVERSITY et al., Defendants.

Civ. No. 78-262.

United States District Court, M. D. Pennsylvania.

February 2, 1979.

COPYRIGHT MATERIAL OMITTED

Joseph S. Finkelstein, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for plaintiff.

Grant H. Fleming, Delbert J. McQuaide, McQuaide, Blasko & Brown, State College, Pa., Richard Z. Freemann, Jr., Ballard, Spahr, Andrews & Ingersoll, Philadelphia, Pa., for defendants.

OPINION

MUIR, District Judge.

I. Introduction.

The Plaintiff, American Future Systems, Inc., a corporation whose principal business is the sale of cookware, china, crystal, and silverware to college women, brought this action against the Pennsylvania State University (Penn State), the Board of Trustees of that University, John W. Oswald, the President of Penn State, and M. Lee Upcraft, the Director of Residential Life programs at Penn State, seeking a judgment declaring that Penn State's action in banning American Future Systems representatives from the University Park Campus in the fall of 1977 were unconstitutional and requesting the Court to enjoin Penn State from enforcing its policy against commercial solicitation on the campus to preclude American Future Systems from selling its wares to Penn State students. The case was tried before the undersigned judge sitting with an advisory jury from January 5, 1979 to January 11, 1979. The advisory jury answered a series of special verdict questions indicating its belief that the sole purpose of American Future Systems' visits to the Penn State Campus was to sell its merchandise, that American Future Systems used gifts and other inducements as means of persuading Penn State students to invite their representatives on campus, that American Future Systems had a policy of applying different credit practices to freshmen and minority students than to upper-class Caucasian purchasers, that American Future Systems either concealed or failed to reveal certain information to persons in attendance at American Future Systems shows at which its wares were sold with respect to a Florida holiday drawing, and that American Future Systems was excluded from the Penn State campus because it conducted commercial activities for profit rather than because of Penn State's disapproval of either its credit practices or the "Florida holiday" drawing. The following represent the Court's findings of fact, discussion, and conclusions of law.

II. Findings of Fact.

1. American Future Systems, Inc. is a corporation with a principal place of business at 715 Lancaster Avenue, Bryn Mawr, Pennsylvania, 19010.

2. Edward M. Satell is the President of American Future Systems.

3. Defendant John W. Oswald is the President of Pennsylvania State University (Penn State).

4. M. Lee Upcraft is the Director of Residential Life Services at Penn State.

5. Penn State has adopted a policy with respect to fund raising on campus which is set forth both in the terms, conditions and regulations of the housing and food service contract for undergraduate residence halls and dining halls of the Pennsylvania State University (P5) and in the student handbook at page 82, ? 3, subsection (a)(8).

6. The terms, conditions, and regulations of the housing and food service contract state on page 35 as follows: "The conducting of any business enterprise for personal profit is prohibited in or around the university-operated units."

7. The student handbook at page 82, ? 3, sub-ß (a)(8) reads as follows: "Fund-raising activities are subject to the following restrictions: (8) Lectures, concerts, demonstrations, displays, or exhibits may not be used in any manner as a means of promoting commercial companies, products, or services."

8. In addition to regulating commercial sales, Penn State has adopted certain policies relating to solicitation, which is defined as donations or sales of products for the benefit of non-university charitable organizations, canvassing, which is defined as any effort to influence student opinions specifically excluding solicitation or fund-raising, visitation of students in their rooms either by university or non-university individuals, and the manner by which students are permitted to have overnight guests in a residence hall.

9. Although Penn State prohibits the use of residence hall areas for the benefit of commercial organizations, an individual student who intends to purchase goods or services is permitted to invite a vendor of those goods or services to the residence hall for the purpose of transacting business with him.

10. Penn State's policy against commercial solicitation does not prohibit vendors from attempting to sell their merchandise to Penn State students by means of telephone communication directed into the residence halls.

11. The telephone numbers of students residing in a particular residence hall are available in the lobby of that building.

12. Members of the general public who have not been invited into a residence hall for a specific purpose may enter the lobby of a dormitory in order to examine the list of phone numbers.

13. A "no trespassing" sign is posted at or near the entrance of each residence hall on the Penn State Campus.

14. The residence halls at Penn State contain a number of rooms ranging between 24 and 300 each and there are a total of 6,900 rooms on the University Park Campus. Residence hall facilities are reserved for the use of residence hall residents and their properly invited visitors or guests.

15. Most residence halls on the Penn State Campus have a study lounge designed to be occupied by three to 12 persons as well as other common areas, including bathrooms, storage rooms, and laundry rooms.

16. Any student living in the residence halls at Penn State signs a housing contract which states that he has read the terms and conditions regulating the use of such residence halls and agrees to abide by those terms.

17. The basis of Penn State's policy against commercial activity within the residence halls is the view of the members of the Residential Life Services department that the proper study atmosphere and privacy of the students would be impossible to maintain if commercial vendors were permitted to attempt to conduct sales activities within the residence halls.

18. Penn State's policy against commercial activities on campus does not prevent commercial businesses from advertising in student newspapers or on student radio stations.

19. There is no restriction placed by Penn State on the content of commercial items mailed to Penn State students by means of the United States mails.

20. American Future Systems is engaged in the business of selling cookware, china, crystal, and silverware to college-age women.

21. The sales activities of American Future Systems, Inc. which are relevant to this case relate to attempted sales of a selected number of patterns of china, crystal, silverware and cookware known collectively as the "American Prestige Series."

22. American Prestige Series goods are generally sold at demonstrations or shows attended by the "hostess," a "sales representative," and a number of invited guests.

23. With respect to its sales to college students, American Future Systems operates by having either its "booking office," located at its headquarters in Bryn Mawr or its sales representative who has responsibility for that geographic area in which the college is situated seek out a particular college student by telephone and asking her if she would like to host an American Prestige show on campus.

24. At the time of the initial telephone contact, a student hostess is informed that if she hosts the show, she will be given a tote bag and that there is the possibility that one of the attendees of the show, including herself, will win a "Florida holiday."

25. The value of the tote bag mentioned in the preceding paragraph is $6.00.

26. During the initial telephone conversation, the American Future Systems representative indicates to the student being solicited that the Florida holiday is a vacation in Florida for four days and three nights and does not include meals and transportation.

27. No other terms and conditions relating to the Florida holiday are mentioned during the initial phone contact.

28. Before the scheduled show, a student agreeing to host such a demonstration receives a packet of information containing a number of invitations for guests and a description of what is involved at the show.

29. A sales demonstration put on by American Future Systems generally proceeds in two parts: A demonstration of the American Prestige Series products including a comparison of those products with other merchandise and an explanation of why American Prestige products are superior, and a sales portion where interested students are given an opportunity to purchase products on an installment plan basis.

30. Each student attending the show receives a jade necklace which has a value of $.12O.

31. At the times relevant to this proceeding, it was American Future Systems' policy to attempt to have 10 to 15 persons in attendance at a sales demonstration. That number does not include men, college freshmen, or non-college students.

32. American Future Systems' policy prohibited the drawing of a winner of the Florida holiday or the awarding of the tote bag to a hostess if 10 eligible persons did not attend the show although the latter aspect of that policy is often violated by individual sales representatives.

33. The price of a "package" of merchandise sold to a student by American Future Systems ranges from $450.00 to $600.00.

34. If 10 eligible persons do not attend a sales demonstration, American Future Systems' representatives are under instructions to inquire of a student hostess whether they can go door to door accompanied by the hostess in a residence hall in order to secure the required number of persons for attendance at a show.

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