American Future Systems v. Pennsylvania State University

• Decision Date: 05 August 1983
• Docket Number: Civ. No. 81-0171.
• Citation: 568 F. Supp. 666
• Parties: AMERICAN FUTURE SYSTEMS, INC., et al., Plaintiffs, v. The PENNSYLVANIA STATE UNIVERSITY, et al., Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

568 F. Supp. 666

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

Civ. No. 81-0171.

United States District Court, M.D. Pennsylvania.

August 5, 1983.

James T. Moughan, Henry T. Reath, George E. Pierce, Jr., Duane, Morris & Heckscher, Philadelphia, Pa., for plaintiffs.

Delbert J. McQuaide, R. Mark Faulkner, McQuaide, Blasko, Schwartz, Fleming & Faulkner, State College, Pa., for defendants.

OPINION

MUIR, District Judge.

I. Introduction.

Plaintiffs, American Future Systems, Inc. (AFS), Steven Brubaker, Richard J. Wingert, W. Bruce DelValle, Joan D. Varsics, Dennis C. Habecker, John B. Spillar and Kevin Graves, filed this action alleging violation of their constitutional rights and rights granted by Pennsylvania law by Defendants the Pennsylvania State University (Penn State), the Board of Trustees of Penn State, John D. Oswald and M. Lee Upcraft on February 5, 1981. This is the second lawsuit before the Court involving Penn State's regulation of commercial activities in its dormitories.

In the first lawsuit, judgment was granted in favor of Penn State upholding its regulations against an attack that they violate the First Amendment rights of AFS. American Future Systems, Inc. v. Pennsylvania State University, 464 F.Supp. 1252 (M.D.Pa.1979) (Muir, J.), aff'd, 618 F.2d 252 (3d Cir.1980) (American Systems I). In this case, the second lawsuit filed by American Future Systems, Plaintiffs filed a motion for a preliminary injunction which was denied by this Court in American Future Systems v. Pennsylvania State University, 510 F.Supp. 983 (M.D.Pa.1981) (Muir, J.) (American Future Systems II). By opinion and order of September 16, 1981, this Court granted summary judgment in favor of the Defendants. American Future Systems II, 522 F.Supp. 544 (M.D.Pa.1981) (Muir, J.). On August 9, 1982, the Court of Appeals reversed this Court's grant of summary judgment and remanded the case to this Court for further proceedings. American Future Systems II, 688 F.2d 907 (3d Cir. 1982).

On October 18, 1982, Plaintiffs AFS, Kevin Graves and other student plaintiffs renewed their motion for a preliminary injunction. A hearing on the Plaintiff's motion commenced on Thursday, December 2, 1982, and concluded on Saturday, December 4, 1982. On December 21, 1982, this Court issued an opinion and order with respect to the motion for preliminary injunction. American Future Systems v. Pennsylvania State University, 553 F.Supp. 1268 (M.D.Pa. 1982) (Muir, J.) (American Future Systems III). The Court's order provided, inter alia, that:

Pending final hearing or further order of this Court, Defendants John W. Oswald, M. Lee Upcraft, the Board of Trustees of the Pennsylvania State University, Pennsylvania State University, and its employees and agents, are hereby enjoined from enforcing Paragraph 3 of the "Regulations for the Solicitation of Money or the Sale or Solicitation of Sale of Products or Services in University Resident Halls," promulgated November 19, 1982, with respect to Kevin Graves, the only named individual student plaintiff who resides in Penn State's residence halls. Order of December 21, 1982 at ¶ 6.

The Court further placed the case on the Court's Williamsport, July 1983 trial list for disposition on the merits.

On December 14, 1982, while the motion for a preliminary injunction was under advisement before the Court, Plaintiffs filed a motion to join Kathy Johnson as an additional Plaintiff in this action. The motion was granted on January 18, 1983.

On February 7, 1983, Plaintiffs filed a motion for summary judgment. By order of March 10, 1983, the motion for summary judgment was denied by the Court. In particular, the Court noted that its findings of fact and conclusions of law in the December 21, 1982 opinion were based solely on and limited to the evidence and legal arguments submitted relating to a request for preliminary injunctive relief. The Court expressly stated in its opinion of December 21, 1982 that, at that juncture, it was "only proper for the Court to determine whether or not Plaintiffs have satisfied the requirements for the issuance of a preliminary injunction granting relief sought in the complaint." American Future Systems III, 553 F.Supp. at 1277. With respect to the rights of the student plaintiffs, the Court stated that "It is likely that the free flow of ideas resulting from attendance at group commercial demonstrations and solicitations is protected by the First Amendment. The right to serve as host or hostess for such demonstrations is also likely protected." American Future Systems III, 553 F.Supp. at 1278 (emphasis added). The Court concluded in its opinion granting preliminary injunctive relief that "Penn State's enunciation of its alleged `significant governmental interest' supporting the Dormitory Solicitation Regulations is unconvincing...." and that "... Penn State will likely not establish at trial that its dormitory solicitation regulations `serve a significant governmental interest.'" 553 F.Supp. at 1280-1281 (emphasis added). Envisioning that Penn State would produce evidence at trial which might substantiate its Dormitory Solicitation Regulations, the Court denied the Plaintiffs motion for summary judgment.

On April 26, 1983, the Court approved a stipulation in which Plaintiffs and Defendants agreed that no further evidence would be presented. Plaintiffs and Defendants further stipulated that the following additional fact be made part of the record:

Kathy Johnson is a party to this action who, as of the date of this Stipulation, is a freshman at Penn State and resides in a dormitory room in a University residence hall. She has desired and continues to desire to host and/or attend the kind of demonstration conducted by the Plaintiff, American Future Systems, and which is precluded under university regulations. Stipulation at ¶ 6(a).

The parties agreed to submit briefing on the application for a permanent injunction.

On June 13, 1983, for the first time during the period of approximately 5½ years since this and its companion litigation began (American Future Systems I was filed on December 22, 1977), the Defendants filed a motion to dismiss the complaint for lack of subject matter jurisdiction, contending that the actions of Penn State's Board of Trustees and officials do not constitute conduct under color of state law. By order of July 26, 1983, the Court concluded that it was well settled in this Circuit that the actions of Penn State constituted conduct under color of state law. E.g., Benner v. Oswald, 444 F.Supp. 545 (M.D.Pa.1978) (Muir, J.), aff'd, 592 F.2d 174 (3d Cir.1979); Klain v. Pennsylvania State University, 434 F.Supp. 571 (M.D.Pa.1977) (Herman, J.); Braden v. University of Pittsburgh, 392 F.Supp. 118 (W.D.Pa.1975), aff'd, 552 F.2d 948, 956 (3d Cir.1977). Accordingly, the motion of the Defendants to dismiss the complaint was denied.

II. Discussion.

As a result of the narrowing of the issues in this litigation, the sole question before the Court is whether or not Penn State's Dormitory Solicitation Regulations limiting commercial activities in individual student's dormitory rooms violate the constitutional rights of the student Plaintiffs. The parties agree that the only student plaintiffs who have standing to challenge the Dormitory Solicitation Regulations are students who are presently residing in Penn State's residence halls and who desire to serve as host or hostess for a group demonstration and solicitation such as that provided by AFS. Kevin Graves and Kathy Johnson are the only such named student Plaintiffs who have standing to sue.

While the issue of the validity of Penn State's Dormitory Solicitation Regulations has twice been to the Court of Appeals of this Circuit, American Future Systems II, 688 F.2d 907 (3d Cir.1982); American Future Systems I, 618 F.2d 252 (3d Cir.1980), the primary emphasis of prior litigation has related to the rights of AFS and presentations in "common areas" of Penn State's residence halls. As a result of recent case law in this Circuit, the issues of the rights of AFS and presentations in "common rooms" areas are no longer directly involved in this case. See International Society for Krishna Consciousness, Inc. v. New Jersey Sports and Exposition Authority, 691 F.2d 155 (3d Cir.1982); American Future Systems III, 553 F.Supp. at 1276-77. See also, American Future Systems I, 618 F.2d at 256. Cf. Petition of Plaintiffs for Leave to Amend or Supplement Complaint and Motion for Preliminary Injunction Doc. No. 150, filed on November 29, 1982 and Orders Granting Petition, Doc. Nos. 175, 176, filed December 2, 1982. Thus, there is little guidance from the Court of Appeals in its prior decisions in the American Future Systems litigation on the issue presently before the Court.

Preliminarily the Court must determine the extent to which the student Plaintiffs have constitutional rights which are infringed, if at all, by Penn State's Dormitory Solicitation Regulations. The Defendants take the position that the speech at issue in this case is "commercial" in nature and, therefore, not subject to First Amendment protection. The Defendants rely on Central Hudson Gas and Electric v. Public Service Commission, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), in which the Court declared that "At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading." 447 U.S. at 566, 100 S.Ct. at 2351. The Defendants contend that AFS's presentation is misleading, if not unlawful, and point to several Federal Trade Commission regulations which AFS's presentation is alleged to violate. See 16 C.F.R. § 429.1 et seq.

The reliance of the Defendants on Central Hudson Gas is misplaced. As recognized by this Court in American Future Systems III, the issue is...