State v. Feld, 1

• Citation: 745 P.2d 146,155 Ariz. 88
• Decision Date: 04 August 1987
• Docket Number: No. 1,CA-CR,1
• Parties: , RICO Bus.Disp.Guide 7094 STATE of Arizona, Appellant, v. Steven FELD, Larry Chabler, Appellees. 9471.
• Court: Court of Appeals of Arizona

Page 146

745 P.2d 146

155 Ariz. 88, RICO Bus.Disp.Guide 7094

STATE of Arizona, Appellant, v. Steven FELD, Larry Chabler, Appellees.

No. 1 CA-CR 9471.

Court of Appeals of Arizona,

Division 1, Department C.

Aug. 4, 1987.

Review Denied Dec. 1, 1987.

[155 Ariz. 90] Thomas E. Collins, Maricopa Co. Atty. by H. Allen Gerhardt, Randy H. Wakefield, Deputy Co. Attys., Phoenix, for appellant State.

Richard J. Hertzberg, Phoenix, for appellees Feld and Chabler.

Robert K. Corbin, Atty. Gen. by Patrick M. Murphy, Chief Counsel, Financial Fraud Div., Katrin M. Nelson, John B. Shadegg, Joseph M. Hennelly, Jr., Asst. Attys. Gen., Phoenix, amicus curiae.

OPINION

CORCORAN, Judge.

Defendants Steven Feld and Larry Chabler were charged by Count I of the criminal indictment with conducting an illegal enterprise through racketeering. The other three counts of the indictment alleged the exhibition of obscene films by various combinations of the individual defendants and a corporate defendant, C.A.T., Inc., dba Erotica Motel. Defendants Feld and Chabler moved to dismiss Count I and the trial court granted the motion and the state appealed. See A.R.S. § 13-4032(1); Litak v. Scott, 138 Ariz. 599, 676 P.2d 631 (1984). C.A.T., Inc. is not a party to this appeal. Defendants moved to delay trial of the other counts pending resolution of this appeal. The motion was granted. We vacate the order of dismissal and reinstate Count I.

The trial court explained its reasoning for granting the motion to dismiss, which we summarize as follows:

1. The pre-conviction remedies of A.R.S. § 13-2314(C) constitute impermissible prior restraints on protected expression when employed in RICO/obscenity prosecutions.

2. Similarly, the post-conviction remedies of § 13-2314(D) are generally inappropriate for application in obscenity cases.

3. To try to interpret § 13-2314(B), (C) and (D) in such a way as to render them constitutional would require a tortuous interpretation which would not reflect the legislature's intent.

4. The civil burden of proof made applicable by § 13-2314(F) further complicates the constitutional problems of the remedies.

5. Once the civil remedies of § 13-2314 have been made inapplicable to obscenity prosecutions, to allow the use of obscenity as a predicate offense for racketeering makes no sense, because the only remaining effect is to convert conduct that is a class 6 felony under A.R.S. § 13-3502 into a class 3 felony under § 13-2312, which cannot be the legislative intent in making obscenity a predicate offense under the RICO statutes.

The issue presented is whether the trial court erred by finding that the Arizona organized crime and fraud statutes (RICO), A.R.S. § 13-2301 et seq., are unconstitutional as applied to obscenity proceedings, and by granting defendants' motion to dismiss Count I. RICO is an acronym for the federal Racketeer Influenced and Corrupt Organizations statutes, 18 U.S.C. § 1961 et seq., upon which the Arizona racketeering statutes are based. See A.R.S. §§ 13-2312 to -2315, Historical Notes; Baines v. Superior Court, 142 Ariz. 145, 148, 688 P.2d 1037, 1040 (App.1984).

Under RICO,

["r]acketeering" means any act, including any preparatory or completed offense, committed for financial gain, which is chargeable or indictable under the laws of the state in which the act occurred ... and punishable by imprisonment for more than one year, regardless of whether such act is charged or indicted, involving: ... [o]bscenity.

A.R.S. § 13-2301(D)(4). A.R.S. § 13-3501(2) defines an item as obscene when: (a) the "average person, applying contemporary state standards, would find that the item, taken as a whole, appeals to the prurient interest; ... (b) [such person] would find that the item depicts or describes, in a patently offensive way, sexual activity; ... [and] (c) [t]he item, taken as a whole, lacks serious literary, artistic, political or scientific value." ¹

The state argues that the remedies set forth in A.R.S. § 13-2314 are constitutional on their face, and if not, must be interpreted in such a way as to be constitutional, if possible. The state also urges that even if some remedies are unconstitutional, the trial court was not justified in finding that obscenity could not be used as a predicate offense under the RICO statutes. Defendants urge that the majority of the prejudgment and post-judgment RICO remedies are unconstitutional as applied to obscenity and that it makes little sense for the court to try to save any of the provisions once the unconstitutional portions thereof are excised. Defendants also argue that the crime of illegally conducting an enterprise through obscenity is unconstitutionally vague.

We need not here recount the long history of the law dealing with obscenity. See State ex rel. Collins v. Superior Court [Scott], Ariz., No. 17962-SA (1986). In general, publications are presumed to be protected from governmental interference pursuant to the first amendment of the United States Constitution. Roaden v. Kentucky, 413 U.S. 496, 93 S.Ct. 2796, 37 L.Ed.2d 757 (1973). Obscenity is not within the area of constitutionally protected speech or press and may therefore be regulated by the State. Roth v. United States, 354 U.S. 476, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957); State v. Book-Cellar, Inc., 139 Ariz. 525, 679 P.2d 548 (App.1984). However, "[w]hile obscenity is not constitutionally protected, the procedure by which we determine what is obscene, unprotected speech directly implicates the first amendment because the threat of criminal prosecution chills freedom of expression." State ex rel. Collins v. Superior Court [Scott], (dissent). The line between protected and unprotected speech is finely drawn and requires the use of sensitive tools to discern and enforce the boundary. E.g., Erznoznik v. City of Jacksonville, 422 U.S. 205, 95 S.Ct. 2268, 45 L.Ed.2d 125 (1975). The legislature, by making obscenity a predicate offense under the racketeering statute, has called into question the constitutionality of some portions of RICO when applied to obscenity because the remedies which are appropriate to other RICO criminal offenses are unconstitutionally overbroad in the obscenity area when applied to protected speech as opposed to unprotected obscenity.

Nevertheless, courts strive to save statutes which may be interpreted to be constitutional. Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 105 S.Ct. 2794, 86 L.Ed.2d 394 (1985); State ex rel. Kidwell v. U.S. Mktg., Inc., 102 Idaho 451, 631 P.2d 622 (1981), appeal dismissed, 455 U.S. 1009, 102 S.Ct. 1649, 71 L.Ed.2d 878 (1982). Thus, in interpreting Arizona statutes dealing with obscenity this court has, when possible, given the questioned statute a constitutional construction. Book-Cellar, 139 Ariz. at 528, 679 P.2d at 551. Our duty is to uphold statutes, even if they are not artfully drawn. Id. By adding obscenity as a predicate offense in § 13-2301, the legislature manifested an intent that where obscenity is connected to racketeering, it needs to be dealt with in the racketeering statutes, rather than solely through the obscenity statutes, A.R.S. § 13-3501 et seq., or nuisance statutes, A.R.S. § 12-811 et seq. We therefore strive to interpret the questioned statutes to effect that intent, to the extent that is constitutionally permissible.

1. Standing

Initially, we must determine whether defendants have standing to challenge the constitutionality of RICO as applied to obscenity charges.

The state asserts that it will not attempt to seize items or close businesses before trial, but will only request orders necessary to maintain the status quo. Thus, it might be argued that defendants have no standing to contest what the state might do. Although the state in its original brief "submits it would be a waste of judicial economy to decide this case on the basis that the trial court's ruling was premature," and that "the state agrees that the trial court's ruling should be considered on appeal in its entirety," in its supplemental brief, the state argues that defendants cannot challenge the facial validity of the statute because defendants' activities are clearly obscene. We disagree.

First, even if the items for which defendants are prosecuted are clearly obscene, we must presume that the other activities of defendants are protected activity. The possible chilling effect of the RICO remedies on presumptively protected activities and the fact that defendants are being prosecuted and could be subject to any of the remedies set forth in § 13-2314 entitles them to contest the constitutionality of § 13-2314 and requires the court to do a facial analysis of the statute before prosecution proceeds. Polykoff v. Collins, 816 F.2d 1326 (9th Cir.1987); J-R Dist., Inc. v. Eikenberry, 725 F.2d 482 (9th Cir.1984), rev'd on other grounds sub nom. Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 105 S.Ct. 2794, 86 L.Ed.2d 394 (1985). See also State v. Tocco, 1 CA-CR 7480, slip op. at 4 (Ariz.App. Dec. 2, 1986), review pending in CR-87-0032-PR (April 7, 1987); Western Business Sys., Inc. v. Slaton, 492 F.Supp. 513 (N.D.Ga.1980). As stated in the dissent in State v. Superior Court. "The threat of unbridled and unhindered criminal prosecution is bound to have a chilling effect upon publishers, libraries, motion picture exhibitors and the like." Moreover, our consideration of § 13-2314 indicates grave constitutional problems which would plague RICO obscenity prosecutions and affect protected activities without judicial guidance as to what constitutional limits must be placed on such prosecutions.

2. Vagueness

Section 13-2312(B), under which defendants were charged, provides:

A person commits illegally conducting an enterprise if such person is employed or associated with any enterprise and conducts or participates in the conduct of such enterprise's affairs through racketeering [i.e., obscenity].

Section 13-2312(C) makes that act a class 3 felony. We r...