American Press Co. v. Grosjean

• Decision Date: 22 March 1935
• Docket Number: No. 315.,315.
• Citation: 10 F. Supp. 161
• Parties: AMERICAN PRESS CO., Inc., et al. v. GROSJEAN.
• Court: U.S. District Court — Eastern District of Louisiana

10 F. Supp. 161

AMERICAN PRESS CO., Inc., et al. v. GROSJEAN.

No. 315.

District Court, E. D. Louisiana, Baton Rouge Division.

March 22, 1935.

Clement M. Moss, of Lake Charles, La., Taylor, Porter & Brooks, of Baton Rouge, La., Deutsch, Kerrigan & Burke, of New Orleans, La., Tucker & Mason, of Shreveport, La., Mouton & Davidson, of Lafayette, La., Thornton, Gist & Richey, of Alexandria, La., Spencer, Gidiere, Phelps & Dunbar, of New Orleans, La., Elisha Hanson, of Washington, D. C., and Bennett C. Clark, of St. Louis, Mo., for plaintiffs.

Gaston L. Porterie, Atty. Gen., of the state of Louisiana, and Charles J. Rivet, Sp. Asst. to Atty. Gen., for defendant.

Before FOSTER, Circuit Judge, and DAWKINS and BORAH, District Judges.

BORAH, District Judge.

This is a suit in equity attacking the constitutionality of Act No. 23 of the General Assembly of Louisiana of 1934, and seeking to enjoin its enforcement. The nine plaintiffs who have initiated this action are Louisiana corporations, each of whom own and publish 1 or more newspapers in various cities of this state. The defendant is the state official who is charged with the duty of administering and enforcing the provisions of this act and of collecting the license taxes sought to be imposed thereby. On motion of the attorneys for the plaintiffs, a District Court of three judges was organized and convened to hear its application for an interlocutory injunction, a preliminary restraining order having been granted after notice and hearing because of the danger of irreparable injury being caused to plaintiffs before a hearing could be had and the matter determined on said application for interlocutory injunction. After a full hearing, at which evidence was introduced in the form of affidavits and argument had by counsel, the court is of the opinion that defendant's plea to the jurisdiction should be dismissed, and that plaintiffs' prayer for an interlocutory injunction should be granted, and makes the following findings of fact and conclusions of law:

Findings of Fact.

The verified pleadings and affidavits filed herein show that the nine plaintiffs are Louisiana corporations, each of whom own and publish 1 or more newspapers in seven of the principal cities of the state. In the aggregate, 15 newspapers are published by the plaintiffs and of that number all save 2 have a circulation of more than 20,000 copies per week within the state of Louisiana. There are no newspapers, magazines, periodicals, or other publications published within the state of Louisiana having a circulation of more than 20,000 copies per week except the 13 newspapers owned and published by petitioners. However, there are published within the state of Louisiana 4 daily newspapers having a circulation of but slightly less than 20,000 copies per week, and these newspapers, with but one minor exception, compete with all of the newspapers published by petitioners both as to circulation and advertising. The same competition exists in a modified degree with reference to the 120 weekly newspapers published in the state, though none of them have a circulation of as much as 20,000 copies per week. In fine there are approximately 163 publications published in the state of Louisiana that are engaged in the business of selling and publishing advertising, and of that number the 13 newspapers owned and published by plaintiffs are the only ones sought to be taxed by this act.

The bill of complaint alleges and the affidavits show that there are six principal media of advertising, and that there was spent throughout the United States during the year 1933 for such advertising approximately the following:

                (1) Newspaper advertising               $453,000,000.00
                (2) Magazine advertising .............   137,000,000.00
                (3) Radio broadcast advertising ......    57,000,000.00
                (4) Outdoor advertising ..............    40,000,000.00
                (5) Street car card advertising ......    11,000,000.00
                (6) Motion picture advertising
                     — less than ...............    10,000,000.00
                                                        _______________
                           Total .....................  $708,000,000.00
                

It further appears that in the state of Louisiana the revenue derived by these various media of advertising is in substantially the above ratio.

The newspapers in question and all newspapers in general derive their revenues almost entirely from moneys paid by regular subscribers or purchasers of said publications and from moneys paid for the insertion of advertisements therein. Of the income thus realized, that which is derived from circulation constitutes a substantial part of the total revenue though it falls far short of meeting the cost of production and varies materially in its ratio to advertising revenue with respect to particular publications. While it is undoubtedly true that volume of circulation is a factor to be considered in fixing advertising rates, it is only one of several factors. The character of circulation, the competitive conditions in the particular territory served by the newspaper, the economic conditions prevailing in the territory, and other factors are of great importance.

The statute complained of, Act No. 23 of the General Assembly of Louisiana of 1934, provides in section 1: "That every person, firm, association or corporation, domestic or foreign, engaged in the business of selling, or making any charge for, advertising or for advertisements, whether printed or published, or to be printed or published, in any newspaper, magazine, periodical or publication whatever having a circulation of more than 20,000 copies per week, or displayed and exhibited, or to be...