Gannett Satellite Information Network, Inc. v. Metropolitan Transp. Authority, 1394
| Decision Date | 28 September 1984 |
| Docket Number | D,No. 1394,1394 |
| Citation | 745 F.2d 767 |
| Parties | 10 Media L. Rep. 2424 GANNETT SATELLITE INFORMATION NETWORK, INC., Plaintiff-Appellee, v. METROPOLITAN TRANSPORTATION AUTHORITY, Long Island Rail Road Company, Metro- North Commuter Railroad Company, Richard Ravitch, individually and as Chairman of Metropolitan Transportation Authority, Long Island Rail Road Company and Metro-North Commuter Railroad Company, Constantine Sidamon-Eristoff, Ronay Menschel, and Jane K. Butcher, individually, as members of the Boards, and as members of the Real Estate Committees of Metropolitan Transportation Authority, Long Island Rail Road Company, and Metro-North Commuter Railroad Company, Marsilia A. Boyle, individually and as Director of Real Estate of Metropolitan Transportation Authority, and Lawrence H. Levine and Kenneth Rydzewski, individually and as Deputy Directors of Real Estate of Metropolitan Transportation Authority, Defendants-Appellants. ocket 84-7111. |
| Court | U.S. Court of Appeals — Second Circuit |
Mary P. Bass, General Counsel, Metropolitan Transp. Authority, New York City (Barbara Dixon, Lester G. Freundlich, Metropolitan Transp. Authority, New York City, of counsel), for defendants-appellants.
Robert C. Bernius, Rochester, N.Y. (Frank H. Penski, Nixon, Hargrave, Devans & Doyle, Rochester, N.Y., Peter Tufo, Anita Barrett, Tufo & Zuccotti, New York City, Alice Neff Lucan, Asst. Gen. Counsel, Gannett Co., Inc., Rochester, N.Y., of counsel), for plaintiff-appellee.
George Freeman, The New York Times Co., Brenda Baker, Dow Jones & Co., Inc., Marjorie T. Coleman, New York News Inc., John Bender, News Group Publications, Inc., New York City, for amici curiae, N.Y. Times Co., Dow Jones & Co., Inc., N.Y. News Inc. and News Group Publications, Inc.
Before MANSFIELD, MESKILL and CARDAMONE, Circuit Judges.
The defendants appeal a summary judgment entered by the United States District Court for the Southern District of New York, Conner, J., 579 F.Supp. 90 (S.D.N.Y.1984), holding that the Metropolitan Transportation Authority's (MTA) licensing scheme for the placement of coin operated newspaper vending machines (newsracks) in MTA commuter train stations and MTA's licensing fees for such placement violated the First and Fourteenth Amendments. The court did not prohibit the issuance of licenses, but enjoined the imposition of revenue raising fees and ordered the adoption of reasonable standards governing license terms and procedures for license issuance. The court limited the permissible standards to reasonable time, place and manner restrictions necessary to preserve "the purpose and efficient operation of the train stations." Id. at 100.
We disagree with the court's holding that MTA's imposition of revenue raising licensing fees necessarily violates the First Amendment. We also disagree that MTA's current licensing scheme is a prior restraint of the press in violation of the First Amendment and that MTA must adopt reasonable standards to govern the issuance and terms of licenses.
MTA is a public benefit corporation organized under the Metropolitan Transportation Authority Act, N.Y.Pub.Auth.Law Secs. 1260 through 1278 (McKinney 1982), which, through its subsidiaries, the Long Island Rail Road Company and Metro-North Commuter Railroad Company, operates the Long Island, Harlem, Hudson and New Haven commuter railroad lines. In 1981, the MTA system encompassed 213 stations and carried approximately 451,850 passengers each work day. The state acquired these privately owned lines after their "financial situation and physical condition" deteriorated, because the "[e]fficient and adequate transportation of commuters within the New York metropolitan area is of vital importance to the commerce, defense and general welfare of the people of the New York metropolitan area, the state, and the nation." 1965 N.Y.Laws c. 324, Sec. 1(1) and (2). MTA was given authority to establish the "fares, tolls, rentals, rates, charges and other fees" for the use and operation of its facilities necessary to maintain its operations on a "self-sustaining basis." N.Y.Pub.Auth.Law Secs. 1261(14) and 1266(3) (McKinney 1982).
Since at least 1965, MTA has permitted the placement of newsracks in its stations' public areas, but has permitted no other types of vending machines. A newspaper distributor seeking to install newsracks must sign a written licensing agreement which establishes the conditions for newsrack placement and provides for the payment of an annual fee. Until 1983, the several distributors who maintained newsracks Although MTA has standardized drafts of the licensing agreements, it is willing to negotiate the final terms of each agreement. MTA also has no rules or regulations governing the negotiation process or the issuance of licenses. The only standard guiding employees who negotiate or issue licenses is MTA's policy of maximizing its revenues.
in MTA stations each paid an annual fee of the greater of $25 per machine or $50 per station. 1
On April 4, 1983, Gannett Satellite Information Network, Inc. (Gannett) sought MTA's permission to place about 100 newsracks for its new morning publication USA Today in public areas of MTA stations. 2 Each newsrack measured two feet by one and one-half feet by two feet, thus occupying three square feet of floor space, and was to be affixed to the station or platform with chains or bolts. Gannett installed its newsracks without MTA permission on April 11, 1983. MTA directed Gannett to remove the newsracks within five days. When Gannett failed to do so, MTA impounded the machines. Gannett and MTA then began to negotiate licensing terms and Gannett was allowed to maintain its newsracks in MTA stations during the term of the negotiations. MTA's proposed licensing agreements required licensing fees of the greater of $75 per machine or $150 per station, about $13,000 for all of the newsracks. When Gannett and MTA were unable to agree on the terms of the licensing agreements, MTA ordered Gannett to remove the USA Today newsracks in mid-July of 1983.
On August 4, 1983, Gannett brought the present action seeking to enjoin MTA from interfering, through the imposition of fees or conditions, with Gannett's placement of USA Today newsracks in MTA stations. Gannett claimed that its right to distribute newspapers through newsracks was protected by the First and Fourteenth Amendments and that MTA's licensing scheme and fees violated these rights because (1) MTA had failed to establish standards to govern the issuance of licenses and had thus given its employees unlimited discretion in prohibiting or conditioning the placement of Gannett's newsracks; (2) MTA's licensing fees were a tax singling out the press and specifically Gannett; and (3) MTA's licensing requirement and fees operated as a prior restraint. 3
Both parties moved for summary judgment; the court granted Gannett's motion. The court held that Gannett's sale of its newspapers through newsracks is protected by the First Amendment. The court then determined that the public areas of MTA stations, although not traditional or designated public forums, are appropriate forums for newsrack distributions. It held that MTA could license the placement of newsracks, but any licensing restrictions would have to be content-neutral reasonable time, place and manner regulations necessary to preserve "the purpose and efficient operation of the train stations." 579 F.Supp. at 100. MTA's existing licensing scheme, the court ruled, was an unconstitutional prior restraint because MTA, by not adopting guidelines for license issuance, had given its employees too much discretion in the granting of licenses and
the negotiation of licensing terms. The court also held that the licensing fees were an unconstitutional prior restraint because the fees did not reflect the administrative costs of licensing, but were intended to raise revenue. Consequently, the court ordered MTA to stop charging revenue raising licensing fees and to submit for the court's approval, within sixty days, rules, regulations and standards to govern license issuance, licensing terms and administrative fees.
MTA's primary claim on appeal is that the district court erred in holding that its revenue raising licensing fees are an unconstitutional prior restraint on Gannett's right to distribute newspapers through newsracks in the public areas of MTA stations. MTA argues that the efficient operation of its commuter passenger service requires that it maximize revenue from its facilities and that the licensing fees serve this revenue raising function. MTA first claims that the public areas of its stations are not appropriate public forums for newsrack distribution and that the fees are permissible regulations to reserve the stations for their intended function, the raising of revenue. Alternatively, it argues that even if the public areas of its stations are public forums, the licensing fees are valid time, place and manner restrictions serving the significant governmental interest of raising revenue for the efficient, self-sufficient operation of the commuter lines.
We do not address MTA's claim that the licensing fees are permissible regulation of non-forum public property because we hold that the MTA stations are appropriate forums for the exercise of Gannett's First Amendment right to distribute its newspapers through newsracks. But, because licensing fees serve the significant governmental interest of raising revenue for the efficient, self-sufficient operation of the rail lines, we hold that they can be valid time, place and manner restrictions on Gannett's right to place its newsracks in those areas.
Without question, Gannett's sale of USA Today is protected by the First Amendment. Lovell v. City of Griffin, 303 U.S. 444, 452, 58 S.Ct. 666, 669, 82 L.Ed. 949 (1938). See Heffron v. International Society for Krishna...
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