Person v. New York Post Corp.

• Decision Date: 22 February 1977
• Docket Number: No. 76 C 1217.,76 C 1217.
• Citation: 427 F. Supp. 1297
• Parties: Carl E. PERSON and Christian Thee, Plaintiffs, v. NEW YORK POST CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of New York

427 F. Supp. 1297

Carl E. PERSON and Christian Thee, Plaintiffs, v. NEW YORK POST CORPORATION, Defendant.

No. 76 C 1217.

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

February 22, 1977.

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Carl E. Person, pro se.

Richard J. Prentiss, Jr., New York City, for plaintiff Christian Thee.

Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for defendant, by Morris B. Abram, and William B. Pollard, III, New York City.

MEMORANDUM AND ORDER

NEAHER, District Judge.

This federal action arises out of plaintiffs' unsuccessful effort to publish a "tombstone advertisement," that is, a brief announcement of a securities offering, in a major New York daily newspaper, the defendant New York Post Corporation (the "Post"). The case is presently before the court on (1) plaintiffs' motion for a preliminary injunction requiring the Post to publish their advertisement or to refrain from publishing all tombstone advertisements, and (2) defendant's motions for dismissal of various claims in the complaint and for summary judgment on antitrust claims alleged therein. For the reasons which follow, plaintiffs' motion is denied and defendant's motions are granted.

On June 22, 1976 Person submitted the tombstone advertisement for the proposed offering with a copy of the offering circular to the Post, among other widely read New York newspapers and magazines.¹ The Post and other newspapers rejected the advertisement² allegedly as not being suitable for their readers. Thereafter plaintiffs brought this action only against the Post, alleging causes of action under the securities, civil rights and antitrust laws as more fully described below.

The thrust of the complaint, briefly stated, is that the officers, employees, attorneys and others of the Post have conspired together, and the Post has conspired with the other major newspapers, to screen proposed securities offerings and to publish only those meeting their standards of investment suitability. This selective publication policy allegedly favors major corporations and governmental agencies, prevents small businesses and persons such as plaintiffs from raising capital and consequently threatens the free enterprise system. As part of this editorial policy, the Post allegedly selectively publishes tombstone ads and slants news stories in favor of corporations who are, presently or prospectively, large advertisers. The public, it is asserted, has no knowledge of this deceptive editorial policy.

Preliminary Injunction Motion

Plaintiffs' motion for a preliminary injunction runs squarely against the wall of freedom of the press. Couching the requested restraint in terms of a ban on discriminatory tombstone advertising renders it no less a restraint. A court may no more tell a privately owned newspaper what not to print than what to print. Miami Herald Publishing Company v. Tornillo, 418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974). That commercial advertising is involved makes no difference. As the Court pointed out in Miami Herald,

"A newspaper is more than a passive receptacle or conduit for news, comment and advertising. The choice of material to go into a newspaper, and the decisions made as to limitations on the size and content of the paper, and treatment of public issues and public officials — whether fair or unfair — constitute the exercise of editorial control and judgment.

It has yet to be demonstrated how governmental regulation of this crucial process can be exercised consistent with First Amendment guarantees of a free press as they have evolved to this time." Id. at 258, 94 S.Ct. at 8240 (footnote omitted and emphasis supplied).

Essentially, plaintiffs' claims are no different from those rejected in Chicago Joint Board, Amalgamated Clothing Workers of America, AFL-CIO v. Chicago Tribune Co., 435 F.2d 470 (7 Cir. 1970). In that case it was urged that "if a newspaper accepts any editorial advertising it must publish all lawful editorial advertisements tendered to it for publication at its established rates." Id. at 478. There a labor union sought access to four newspapers controlled by defendant Chicago Tribune for union advertisements explaining a campaign against imported clothing sold by Marshall Field & Co., a large advertiser in such newspapers. In affirming summary judgment against the union the court pointed out:

"The Union's right to free speech does not give it the right to make use of the defendants' printing presses and distribution systems without defendants' consent." Id.

Like plaintiffs here, the union stressed the public interest which may be affected. Nonetheless the court added:

"We glean nothing from the constitutional guarantees, or from the decisions expository thereof, which suggests that the advertising pages of a privately published newspaper may so be pressed into service against the publisher's will either in the context of a labor dispute to which the publisher is not a party or otherwise." Id.

In that state of the law there is no likelihood of success on the merits and plaintiffs' motion for a preliminary injunction must be denied.³

Dismissal Motion

In a patent attempt to circumvent the Post's first amendment freedom, plaintiffs seek to restrain and hold the Post liable as a violator of securities regulation and civil rights statutes because of its refusal to publish the tombstone ad. Defendant has moved to dismiss such claims under Rule 12, F.R.Civ.P., on grounds that (1) plaintiffs fail to state claims upon which relief can be granted, and (2) plaintiffs in any event lack standing to assert them.

Since the standing issue pervades five separate claims to which defendant's motion is directed, some preliminary discussion of plaintiffs' theory of their right to sue is in order. Characterizing himself as a "political litigator," plaintiff Person maintains he has standing as a private attorney general engaged in activities to enforce federal laws.⁴ Similarly, plaintiff Thee, who is pursuing an antitrust suit against General Mills,⁵ urges that he too derives standing as a private attorney general. Person describes political litigation as private litigation to enforce constitutional and civil rights and federal statutes when the government fails or, in its discretion, declines to act. He argues that private attorneys general must be able to maintain such actions on their own to effectuate Congressional intent in enactment of those laws, and that courts have recognized the concept of the private attorney general to encourage important policy enforcement.

However that may be, courts have also recognized that no matter how imperative is the public interest sought to be vindicated, a plaintiff, in order to have standing to sue, must demonstrate more than abstract concern. Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). It is fundamental that, assuming justiciability of the claim, the constitutional limitations of federal court jurisdiction imposed by Article III require a plaintiff to demonstrate some concrete injury to himself, likely to be redressed by a favorable decision. Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S.Ct. 1917, 1924, 48 L.Ed.2d 450 (1976). See Warth v. Seldin, supra; O'Shea v. Littleton, 414 U.S. 488, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974); Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). A private litigant, in order to have standing to sue, must have a personal stake in the outcome of the action. His personal desire to act as a surrogate for governmental action is no substitute.

With those considerations in mind we turn to an analysis of plaintiffs' several claims to determine whether claims for relief are stated and whether plaintiffs have met the test of standing.

1. Investment Advisers Act

Plaintiffs first claim that the Post's refusal to publish Thee's tombstone ad evidences a policy of selective publication of tombstone ads based on its evaluation of the merits of a proposed offering. Those ads the Post publishes, they allege, are for securities it recommends to its readers for purchase. According to plaintiffs this places the Post in the position of an undisclosed investment adviser, which has violated the Investment Advisers Act because it is unregistered, section 203 of the Act, 15 U.S.C. § 80b-3, and has furnished misleading and deceptive investment advice to its readers, sections 206 and 208 of the Act, 15 U.S.C. §§ 80b-6, -8.

An investment adviser as defined in § 202 of the Act

"means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities; but does not include . . . (D) the publisher of any bona fide newspaper . . . of general and regular circulation; . . .." 15 U.S.C. § 80b-2(a)(11) (emphasis supplied).

Plaintiffs' own papers herein show that the Post has been published daily except Sunday since it was founded in 1801.⁶ And even if that were not the case, such a widely known fact would be a fit subject for judicial notice. The plain truth is that newspapers of general circulation like the Post are not meant to be subject to the Investment Advisers Act and no amount of casuistic ratiocination can make it otherwise.⁷

In view of the court's conclusion that the Investment Advisers Act does not apply to the Post, the question of plaintiffs' standing to sue does not require extended discussion. There being no explicit right of action under the Act, any private remedy must be implied and then only in favor of intended beneficiaries of the Act. Bolger v. Laventhol, Krekstein, Horwath & Horwath, 381 F.Supp. 260, 262 (S.D.N.Y. 1974). Accord, Jones v. Equitable Life Assurance Society of U....