                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-29-2004

The Pitt News v. Atty Gen PA
Precedential or Non-Precedential: Precedential

Docket No. 03-1725




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"The Pitt News v. Atty Gen PA" (2004). 2004 Decisions. Paper 427.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/427


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           PRECEDENTIAL                           Argued: January 22, 2004

       UNITED STATES COURT OF                 Before: ALITO, CHERTOFF, and
               APPEALS                         DEBEVOISE,** Circuit Judges
        FOR THE THIRD CIRCUIT
             ____________                      (Opinion Filed: July 29, 2004 )

             No. 03-1725                   WITOLD J. WALCZAK (argued)
            ____________                   American Civil Liberties Union
                                           313 Atwood Street
           THE PITT NEWS,                  Pittsburgh, PA 15213

                   Appellant               Counsel for Appellant

                   v.                      J. BART DeLONE (argued)
                                           15 th Floor
GERALD J. PAPPERT, in his capacity         O f f i c e of A ttor n ey Gen eral   of
       as Attorney General of the          Pennsylvania
   Commonwealth of Pennsylvania * ;        Strawberry Square
FRANK KOSCELNAK, in his capacity           Harrisburg, PA 17120
 as Director, Bureau of Liquor Control
Enforcement, Pennsylvania State Police;    Counsel for Appellee
JOHN E. JONES, III, in his capacity as
Chairman Pennsylvania Liquor Control       GAYLE C. SPROUL
                 Board                     Levine, Sullivan, Koch & Schultz
                                           2004 Makefield Road
         ___________________               Yardley, PA 19067

  ON APPEAL FROM THE UNITED                Counsel for Amicus Curiae The Student
    STATES DISTRICT COURT                  Press Law Center, PA Newspaper
 FOR THE WESTERN DISTRICT OF               Association, and Reports Committee for
        PENNSYLVANIA                       Freedom of the Press

District Court Judge: Honorable William            ____________________
               L. Standish
         (D.C. No. 99-cv-00529)                  OPINION OF THE COURT
         ____________________

                                                  **
                                                    The Honorable Dickinson R.
                                           Debevoise, District Judge of the United
   *
   Pursuant to Federal Rule of Appellate   States District Court for the District of
Procedure 43(c)(2).                        New Jersey, sitting by designation.
____________________                                       The Pitt News was created by the
                                                   University Board of Trustees “in
ALITO, Circuit Judge:                              recognition of the constitutional right of
                                                   students to freedom of speech.”          The
        The     case      concerns      th e       parties do not dispute that the paper
constitutionality of a Pennsylvania law that       represents independent student speech, not
bans advertisers from paying for the               official speech disseminated on behalf of
dissemination of “alcoholic beverage               the University.       The newspaper is
advertising” by communications media               published daily during the school year and
affiliated with a university, college, or          weekly during the summer, and it is
other “educational institution.” The Pitt          distributed free of charge at 75 locations
News, a university newspaper, sought an            around the campus. The Pitt News is
injunction against enforcement of the law,         displayed at these locations together with
but the District Court granted summary             other free weekly newspapers, including
judgment for the defendants, holding that          In Pittsburgh, City Paper, and UR
the law “has no effect on The Pitt News’           Pittsburgh.      None of these other
freedom of expression” because the paper           publications is affiliated with an
remains free to say whatever it wishes             educational institution, and they all contain
about alcoholic beverages as long as it is         alcoholic beverage advertisements. All of
not paid for engaging in the expression.           The Pitt News’ revenue is derived from
                                                   advertising, and until Act 199 took effect,
       We hold that the First Amendment            the paper received substantial income from
precludes the enforcement of the law in            alcoholic beverage ads.
question against advertisers in The Pitt
News, and we therefore reverse the order                  In 1996, the Pennsylvania
of the District Court and remand for the           Legislature enacted an amendment to the
entry of a permanent injunction.                   state Liquor Code that is popularly known
                                                   as “Act 199.”      A provision of this
                    I.                             amendment, 42 Pa. Stat. Ann. §4-498
                                                   (e)(5)(g) (hereinafter “Section 4-498”),
        The Pitt News is a certified student       prohibits “any advertising of alcoholic
organization at the University of                  beverages” in virtually any medium of
Pittsburgh (“the University”).          The        mass communication that is affiliated with
University has more than 25,000 students,          “any educational institution,” including a
at least two-thirds of whom are old enough         college       or     university.1
to drink under Pennsylvania law. Overall,
more than 75% of the total University
population (students, faculty, and staff) is          1
                                                          “Act 199” states in relevant part:
more than 21 years of age.
                                                             §    4-49 8.    Unlaw ful

                                               2
                                         Violations of this provision are
                                         misdemeanors and may be punished by
                                         fines of up to $500 or imprisonment for up
        advertising
                                         to three months on a first charge, and by a
                                         mandatory minimum sentence of three
(e) The following shall apply
                                         months in jail for a subsequent offense.
to all alcoholic beverage and
                                         See 47 Pa. Stat. Ann. § 4-494(a).
malt beverage advertising:
                                               To clarify the meaning of Act 199,
(4) The use in any                       the Pennsylvania Liquor Control Board
advertisement of alcoholic               (LCB) issued Advisory Notice No. 15,
beverages of any subject                 which states in relevant part:
matter, language or slogan
                                                Wh at        kind        of
directed to minors to
                                                advertisements would be
promote consumption of
                                                affected by the prohibition
alcoh olic beverages is
                                                against advertisements in
prohibited. Nothing in this
                                                publications published by,
section shall be deemed to
                                                for and in behalf of any
restrict or prohibit any
                                                educational institution?
advertisement of alcoholic
beverages to those persons                      A dve r tise ments    wh ic h
of legal drinking age.                          indicate the availability
                                                and/or price of alcoholic
(5) No advertisement shall                      beverages may not be
be permitted, either directly                   contained in publications
or indirectly, in any booklet,                  published by, for and in
program book, yearbook,                         behalf of any educational
magazine, newspaper,                            institutions. Universities are
period ical, brochure,                          c onside re d e duc a tional
circular or other similar
publication published by, for
or in behalf of any                             newspapers, periodicals or
educational institution.                        other publication, outdoor
                                                advertisement, any form of
(g) For purposes of this                        electronic transmission or
s u b s e c ti o n , t h e t e r m              any other printed or graphic
“advertisement” shall mean                      matter, including booklets,
any advertising of alcoholic                    flyers or cards, or on the
beverages through th e                          product label or attachment
medium of radio broadcast,                      itself.
t e l ev i s io n broadcast,

                                     3
       institutions under this                       advertisement. 2
       section.            Thus, an
                                                            On December 9, 1997, Terry Lucas,
       advertisement in a college
                                                     the general manager of The Pitt News,
       newspaper or a college
                                                     received a fax from the owner of an area
       football            program
                                                     restaurant, the Fuel & Fuddle, which had
       a n n o u n c i n g b e v e r a g es
                                                     previously placed alcoholic beverage
       would not be permissible.
                                                     advertisements in the paper. The fax
       However, an advertisement
                                                     consisted of a December 4, 1998, letter to
       merely indicating the name
                                                     the restaurant from the Bureau of Liquor
       and address of a licensee or
                                                     Control Enforcement of the Pennsylvania
       licensed premise, or an
                                                     State Police (BLCE) stating that the BLCE
       adve rtisement which
                                                     had received information that the Fuel &
       indicates what nonalcoholic
                                                     Fuddle had “advertised . . . alcoholic
       products may be acquired at
                                                     beverages, either directly or indirectly, in
       the licensed premise making
                                                     a publication published by, for or in behalf
       n o r e f er e n c e t o t h e
                                                     of an educational institution” and that this
       availability of alcoholic
                                                     could result in the suspension or
       beverages would be
                                                     revocation of its license or in the
       p ermissible.          F urther,
                                                     imposition of a fine. Based on this notice,
       advertisements                   in
                                                     the owner of the restaurant canceled its
       magazines, newspapers or
                                                     advertising contract with The Pitt News,
       other periodicals which have
                                                     and the paper, in order to protect its
       n o connection to an
                                                     advertisers, felt compelled to stop
       educational institution other
                                                     accepting alcoholic beverage
       than the fact the school may
                                                     advertisements.
       subscribe to that particular
       newspaper are permissible .                         The Pitt News then sought to
       ...                                           persuade establishments with liquor
        During testimony in this case, a
representative of the LCB, Faith S. Diehl,
                                                             2
stated that, in the LCB’s view, Section 4-                    The Pitt News submitted the
498 contains two restrictions that are not           deposition of Stanley Woloski, an
expressly set out in the statute. First, Diehl       employee of the Office of the Chief
testified that Section 4-498 is enforceable          Counsel of the Pennsylvania State Police
only against advertisers and not against the         who is assigned to the Bureau of Liquor
media.      Second, according to Diehl,              Control Enforcement (BLCE), which
Section 4-498 applies only when the media            stated that, while Woloski did not
receives some form of payment for an                 “wholeheartedly agree” with Diehl’s
                                                     interpretation of the statute, the BLCE was
                                                     bound by the LCB’s interpretation.

                                                 4
licenses to place ads that did not refer to         lacked standing to ch alleng e the
the sale of alcoholic beverages, but these          constitutionality of Section 4-498. The
efforts were unsuccessful. In 1998 alone,           District Court opined that The Pitt News
the newspaper lost approximately $17,000            could not assert First Amendment rights on
in revenue, and this loss affected the              behalf of advertisers or readers and that
length of the newspaper, as well as its             the paper had not itself suffered any injury
ability to make capital expenditures,               in fact because it could still publish
including payments for updating its                 anything it wanted as long as it was not
computers and acquiring digital cameras.            paid for it.
The inability to make these capital
                                                            On appeal, a panel of this Court (
expenditures has harmed The Pitt News’
                                                    the “TPN I Panel”) affirmed the District
ability to compete for readers with other
                                                    Court’s denial of the preliminary
newspapers. Furthermore, the newspaper
                                                    injunction application, but the panel relied
may be compelled in the future to begin to
                                                    in part on different grounds. See The Pitt
charge subscribers, and this would result in
                                                    News v. Fisher, 215 F.3d 354, 360 (3d Cir.
a further decrease in readership.
                                                    2000) (“TPN I”). While the TPN I Panel
       In April 1999, The Pitt News3 filed          agreed with the District Court that The Pitt
a complaint in the United States District           News did not have standing to assert the
Court for the Western District of                   third-party claims of its advertisers and
Pennsylvania against state officials                readers, the panel found that The Pitt News
responsible for the enforcement of the Act.         did have standing to raise its own First
Asserting claims under 42 U.S.C. § 1983,            Amendment claims. Noting the paper’s
The Pitt News alleged that Section 4-498            loss of advertising revenue, the panel held
violated its constitutional rights to freedom       that the paper had “demonstrated a
of expression, freedom of the press, and            personal stake in the outcome of this
the equal protection of the laws. The Pitt          litigation” and that its injury was both
News moved for a preliminary injunction,            traceable to Section 4-498 and redressable
and an evidentiary hearing was held.                by the courts. TPN I, 215 F.3d at 360
       In July 1999, the District Court                     After determining that The Pitt
denied the motion for a preliminary                 News had standing to challenge Section 4-
injunction and held that The Pitt News              498, the TPN I Panel turned to the familiar
                                                    four-pronged preliminary injunction
                                                    analysis, under which a court assesses “(a)
    3                                               the likelihood that the plaintiff will prevail
      The American Civil Liberties Union
                                                    on the merits at the final hearing; (b) the
Student Club joined as a plaintiff, but the
                                                    extent to which the plaintiff is being
District Court dismissed the club for lack
                                                    irreparably harmed by the conduct
of standing at an early point in the
                                                    complained of; (c) the extent to which the
litigation, and that order is not contested
                                                    defendant will suffer irreparable harm if
here.

                                                5
the preliminary injunction is issued; and          consequently did not go on to analyze any
(d) the public interest.” TPN I, 215 F.3d at       of the other prongs.4
366. At the first step of this analysis, the
                                                         Following the decision in TPN I,
TPN I panel concluded that The Pitt News
                                                   the parties filed cross-motions for
“ha[d] not shown a likelihood of
                                                   summary judgment, and the District Court
succeeding on the merits.” Id. at 367. The
                                                   issued an order granting summary
Court reasoned as follows:
                                                   judgment for the defendants. The Pitt
       The fact that The Pitt News                 News then took this appeal.
       is a newspaper does not give
                                                                       II.
       it a constitutional right to a
       certain level of profitability,                    We exercise plenary review of a
       or even to stay in business at              District Court decision granting summary
       all. . . . Thus, although it is             judgment. See, e.g., Olson v. Gen. Elec.
       true that the enforcement of                Astrospace, 101 F.3d 947, 951 (3d Cir.
       Act 199 has had the effect                  1996). Moreover, under the circumstances
       of driving away certain                     present here, the prior panel’s decision in
       closely regulated businesses                TPN I is not controlling.
       who previously advertised
                                                           When a panel is presented with
       in The Pitt News, this does
                                                   legal issues that are related to issues
       not in itself amount to a
                                                   previously addressed by another panel in
       violation of The Pitt News’
                                                   an earlier appeal in the same case at the
       First Amendment rights.
                                                   preliminary injunction stage, three separate
Id. at 366.                                        rules are relevant. First, it is our Court’s
                                                   tradition that a panel may not overrule “a
        The TPN I panel went on to reject
                                                   holding” of a prior panel. 3d Cir. IOP 9.1.
The Pitt News’ reliance on the “line of
                                                   Second, it is well established that neither
cases holding that it is unconstitutional to
                                                   this tradition nor the law-of-the-case
impose selective taxes or other financial
                                                   doctrine requires a panel hearing an appeal
burdens on newspapers because of their
                                                   from the entry of a final judgment to
content.” TPN I, 215 F.3d at 366-67. The
                                                   follow the legal analysis contained in a
panel found these cases to be
                                                   prior panel decision addressing the
distinguishable because, “[f]irst, they
                                                   question whether a party that moved for
involve taxes, not regulations on
                                                   preliminary injunctive relief showed a
advertising” and, “[s]econd, they involve
fees levied directly against a newspaper.”
Id. at 367. The panel thus held that The
                                                       4
Pitt News had failed to satisfy the first               The Pitt News’ petition for a writ of
prong of the test for the issuance of a            certiorari was denied. See The Pitt News
preliminary injunction, and the panel              v. Fisher, 531 U.S. 1113 (2001).


                                               6
likelihood of success on the merits. See             Court’s traditional practice, should regard
University of Texas v. Camenisch, 451                itself as bound by the prior panel opinion.
U.S. 390, 395 (1981); Council of
                                                             Here, the TPN I panel did not
Alternative Political Parties v. Hooks, 179
                                                     decide whether Section 4-498 is or is not
F.3d 64, 69 (3d Cir. 1999); American Civil
                                                     constitutional. Instead, the TPN I panel
Liberties Union of New Jersey v. Black
                                                     was careful to state only that The Pitt News
Horse Pike Regional Bd. of Educ., 84 F.3d
                                                     “ha[d] not shown a likelihood of
1471, 1476-1477 (3d Cir. 1996). Third,
                                                     succeeding on the merits of its claim.”
although a panel entertaining a preliminary
                                                     215 F.3d at 367 (emphasis added). Had
injunction appeal generally decides only
                                                     the TPN I panel gone further and taken an
whether the district court abused its
                                                     unequivocal position on the merits, we
discretion in ruling on the request for relief
                                                     would consider ourselves bound under the
and generally does not go into the merits
                                                     tradition expressed in IOP 9.1. But the
any farther than is necessary to determine
                                                     TPN I panel did not take that approach.
whether the moving party established a
likelihood of success, a panel is not always                             III.
required to take this narrow approach. If a
                                                           We now turn to the question 5
preliminary injunction appeal presents a
                                                     whether Section 4-498 violates The Pitt
question of law “and the facts are
                                                     News’ First Amendment rights.6 We
established or of no controlling relevance,”
the panel may decide the merits of the
claim. Thornburgh v. Am. College of                     5
Obstetricians & Gynecologists., 476 U.S.                  At the outset, we note two issues that
747, 756 -57 (1986); see also Maldonado              are not before us.                First, the
v. Houston, 157 F.3d 179, 183-84 (3d Cir.            Commonwealth does not suggest that The
1998).                                               Pitt News represents the Commonwealth’s
                                                     own speech as opposed to independent
        In the typical situation – where the         student speech that the University
prior panel stopped at the question of               facilitates in order to foster the expression
likelihood of success – the prior panel’s            of a diversity of views, see Rosenberger v.
legal analysis must be caref ully                    Rector & Visitors of Univ. of Virginia,
considered, but it is not binding on the             515 U.S. 819, 833 (1995). Nor does the
later panel. Indeed, particularly where              Commonwealth suggest that precedents
important First Amendment issues are                 concerning publications associated with
raised, the later panel has a duty, in the           schools below the college level, see, e.g.,
end, to exercise its own best judgment. On           Hazelwood School Dist. v. Kuhlmeirer,
the other hand, if the first panel does not          484 U.S. 260 (1988), have any relevance
stop at the question of likelihood of                here.
success and instead addresses the merits,
                                                         6
the later panel, in accordance with our                   The Pitt News urges us to revisit the
                                                     issue of its standing to assert the First

                                                 7
conc lude that S ection 4-498 is                   speaker’s expression is a content-based
unconstitutional as applied to The Pitt            restriction of expression and must be
News for two reasons. First, the law               analyzed as such.
represents an impermissible restriction on
                                                           The Supreme Court’s decision in
commercial speech. Second, the law is
                                                   Simon & Schuster, Inc. v. Members of the
presumptively unconstitutional because it
                                                   New York State Crime Victims Bd., 502
targets a narrow segment of the media, and
                                                   U.S. 105 (1991), illustrates this point.
the Commonwealth has not overcome this
                                                   There, a career criminal named Henry Hill
presumption.
                                                   provided an author with the information
                     A.
                                                   that the author used in writing a book
      Although the Commonwealth                    about Hill’s life. Under a contract with the
makes much of the fact that Section 4-498          book’s publisher, Hill was entitled to
                                                   compensation, but New York’s “Son of
does not prohibit The Pitt News from
                                                   Sam” law required that these funds be held
printing alcoholic beverage ads but simply
                                                   in escrow for five years for use in
prevents the paper from receiving
                                                   satisfying any civil judgments obtained by
payments for running such ads7 , Section 4-
                                                   the victims of Hill’s crimes. Although the
498 clearly restricts speech. The very
                                                   Son of Sam law did not prohibit Hill from
purpose of Section 4-498 is to discourage
                                                   telling his story and did not prohibit the
a form of speech (alcoholic beverage ads)
                                                   publisher from publishing the book, the
that the Commonwealth regards as
                                                   Supreme Court held that the law placed a
harmful. If government were free to
                                                   content-based restriction on Hill’s speech
suppress disfavored speech by preventing
                                                   and that of the publisher because it
potential speakers from being paid, there
                                                   “impose[d] a financial disincentive only on
would not be much left of the First
                                                   speech of a particular content.” Id. at 116.
Amendment. Imposing a financial burden
                                                   Similarly, Section 4-498 imposes “a
on a speaker based on the content of the
                                                   financial disincentive” on certain speech
                                                   by The Pitt News (alcoholic beverage ads)
Amendment rights of its advertisers and            because would-be advertisers cannot pay
readers. We find it unnecessary to reach           the paper to run such ads, and
this issue, however, because we hold that          consequently Section 4-498, like New
Section 4-498 violates The Pitt News’ own          York’s Son of Sam law, must be analyzed
First Amendment rights.                            as a content-based restriction of speech.

   7                                                      At a minimum, therefore, Section 4-
     Indeed, the Commonwealth suggests
                                                   498 must satisfy the test for restrictions on
that The Pitt News has not “suffered a First
                                                   commercial speech set out in Central
Amendment violation” because Section 4-
                                                   Hudson Gas & Elec. Corp. v. Pub. Serv.
498 “places no restriction on what the Pitt
                                                   Comm’n of New York, 447 U.S. 557
News can or cannot publish.” Appellee’s
                                                   (1980). Under Central Hudson, we must
Br. at 9.

                                               8
engage in “a four-part analysis.” Id. at           New Orleans Broad. Ass’n, Inc. v. U.S.,
566. First, “we must determine whether             527 U.S. 173, 188 (1999). Although the
the expression is protected by the First           government has considerable latitude in
Amendment,” and this means that “it at             the sources on which it may draw to make
least must concern lawful activity and not         this showing, “[t]his burden is not satisfied
be misleading.” Id. Second, “we ask                by mere speculation or conjecture.”
whether the asserted governmental interest         Edenfield v. Fane, 507 U.S. 761, 770-71
is substantial.” Id. If the first and second       (1993); Lorillard Tobacco Co. v. Reilly,
“inquiries yield positive answers, we must         533 U.S. 525, 555 (2001). Furthermore, it
determine whether the regulation directly          is not enough if a law “provides only
advances the governmental interest                 ineffective or remote support for the
asserted, and whether it is not more               government’s purposes,” Edenfield, 507
extensive than is necessary to serve that          U.S. at 770 (quoting Central Hudson, 447
interest.” Id.        H ere, the f irst a nd       U.S. at 564) or if there is “little chance”
second prongs are satisfied. As noted,             that the law will advance the state’s goal.
Section 4-498 burdens speech.             In       Lorillard, 533 U.S. at 566. The Supreme
addition, the law applies to ads that              Court has noted that the third prong of the
concern lawful activity (the lawful sale of        Central Hudson test “is critical; otherwise,
alcoholic beverages) and that are not              ‘a State could with ease restrict
misleading, and we see no other ground on          commercial speech in the service of other
which it could be argued that the covered          objectives that could not themselves justify
ads are outside the protection of the First        a burden on commercial expression.’”
Amendment.                                         Rubin v. Coors Brewing Co., 514 U.S.
                                                   476, 487 (1995)(quoting Edenfield, 507
       There can also be no dispute that
                                                   U.S. at 771).
the asserted government interests –
preventing underage drinking and alcohol                  In this case, the Commonwealth has
abuse – are, at minimum, “substantial.”            not shown that Section 4-498 combats
See, e.g., Lorillard Tobacco Co. v Reilly,         underage or abusive drinking “to a
533 U.S. 525, 589 (2001)(opinion of                material degree,” Florida Bar, 515 U.S. at
Thomas, J.); Michigan Dept. of State               624, or that the law provides anything
Police v. Sitz, 496 U.S. 444, 451 (1990).          more than “ineffective or remote support
                                                   f or the governm ent’s purp oses.”
       Section 4-498 founders, however,
                                                   Edenfield, 507 U.S. at 770 (quoting
on the third and fourth prongs of the
                                                   Central Hudson, 447 U.S. at 564). We do
Central Hudson test. To satisfy the third
                                                   not dispute the proposition that alcoholic
prong, the government must demonstrate
                                                   beverage advertising in general tends to
that the challenged law “alleviate[s]” the
                                                   encourage consumption, and if Section 4-
cited harms “to a material degree.” Florida
                                                   498 had the effect of greatly reducing the
Bar v. Went For It, Inc., 515 U.S. 618, 624
                                                   quantity of alcoholic beverage ads viewed
(1995)(citation omitted); see also Greater

                                               9
by underage and abusive drinkers on the              institutions, the Commonwealth relies on
Pitt campus, we would hold that the third            nothing more than “speculation” and
prong of the Central Hudson test was met.            “conjecture.”
But Section 4-498 applies only to
                                                             Section 4-498 is also not adequately
advertising in a very narrow sector of the
                                                     tailored to achieve the Commonwealth’s
media (i.e., media associated with
                                                     asserted objectives. The fourth step of the
educational institutions), and the
                                                     Central Hudson test does not require
Commonwealth has not pointed to any
                                                     government to use the least restrictive
evidence that eliminating ads in this
                                                     means to achieve its goals, but it does
narrow sector will do any good. Even if
                                                     demand a “reasonable fit between the
Pitt students do not see alcoholic beverage
                                                     legislature’s ends and the means chosen to
ads in The Pitt News, they will still be
                                                     accomplish those ends, . . . a means
exposed to a torrent of beer ads on
                                                     narrowly tailored to achieve the desired
television and the radio, and they will still
                                                     objective.” Lorillard, 533 U.S. at 555
see alcoholic beverage ads in other
                                                     (quotations omitted). Here, Section 4-498
publications, including the other free
                                                     is both severely over- and under-inclusive.
weekly Pittsburgh papers that are
                                                     As noted, more than 67% of Pitt students
displayed on campus together with The
                                                     and more than 75% of the total University
Pitt News.      The suggestion that the
                                                     population is over the legal drinking age,
elimination of alcoholic beverage ads from
                                                     and, in Lorillard, the Supreme Court held
The Pitt News and other publications
                                                     that a restriction on tobacco advertising
connected with the University will slacken
                                                     was not narrowly tailored in part because
the demand for alcohol by Pitt students is
                                                     it prevented the communication to adults
counterintuitive and unsupported by any
                                                     of truthful information about products that
evidence that the Commonwealth has
                                                     adults could lawfully purchase and use.
called to our attention. Nor has the
                                                     Not only does Section 4-498 suffer from
Commonwealth pointed to any evidence
                                                     this same defect, but the Commonwealth
that the elimination of alcoholic beverage
                                                     can seek to combat underage and abusive
ads from The Pitt News will make it harder
                                                     drinking by other means that are far more
for would-be purchasers to locate places
                                                     direct and that do not affect the First
near campus where alcoholic beverages
                                                     Amendment. The most direct way to
may be purchased.          Common sense
                                                     combat underage and abusive drinking by
suggests that would-be drinkers will have
                                                     college students is the enforcement of the
no difficulty finding those establishments
                                                     alcoholic beverage control laws on college
desp ite S ection 4-4 98, an d th e
                                                     campuses. However, studies have shown
Commonwealth has not pointed to any
                                                     that enforcement of these laws on college
contrary evidence. In contending that
underage and abusive drinking will fall if
alcoholic beverage ads are eliminated from
just those media affiliated with educational

                                                10
campuses is often half-hearted 8 , and the            concluding that the law would achieve its
Commonwealth has not demonstrated that                objective (reducing underage drinking)
its law enforcement officers, at either the           than there is in this case, where the
state or local level, or the administrators of        challenged law applies to only a narrow
its colleges and universities engage in               sector of the media.         Similarly, in
aggressive enforcement of these laws on               Anheuser-Busch, there was less force to
college and university campuses.                      the argument that the city could achieve its
                                                      goal by the alternative strategy of
        In arguing that Section 4-498
                                                      increasing enforcement of the laws against
satisfies the Central Hudson test, the
                                                      underage drinking. Because the Baltimore
Co mm onw ealth relies he av ily on
                                                      ordinance was designed to combat
Anheuser-Busch, Inc. v. Schmoke, 63 F.3d
                                                      underage drinking throughout the city, a
1305 (4 th Cir. 1995), which sustained a
                                                      decision to forego the outdoor advertising
Baltimore ordinance that generally
                                                      ban in favor of a campaign of increased
prohibited outdoor alcoholic beverage ads.
                                                      enforcement would have necessitated an
That decision, however, predates Lorillard,
                                                      increase in enforcement over a wide area.
which struck down a ban on outdoor
                                                      Here, increased enforcement could target
tobacco advertising, and in any event,
                                                      very limited, easily identifiable areas –
Baltimore’s showings in Anheuser-Busch
                                                      namely, university and college campuses
on the third and fourth prongs of the
                                                      and surrounding neighborhoods. We thus
Central Hudson test were stronger than the
                                                      find Anheuser Busch to be distinguishable,
Commonwealth’s are here. Because the
                                                      and we hold that Section 4-498 fails the
ordinance in Anheuser-Busch applied
                                                      Central Hudson test.
(with some exceptions) to an entire
medium of communication (outdoor                                           B.
advertising), there was a firmer basis for
                                                             Section 4-498 violates the First
                                                      Amendment for an additional, independent
      8                                               reason: it unjustifiably imposes a financial
       See Henry Wechsler, Barbara A.
                                                      burden on a particular segment of the
Moe ykens, and W illiam DeJong,
                                                      media, i.e., media associated with
“Enforcing the Minimum Drinking Age
                                                      universities and colleges.
Law: A Survey of College Administrators
and Security Chiefs” (2001), available at
                                                                           1.
http://www.edc.org/hec/pubs/enforce.htm.
This study, conducted by the Harvard                         The Supreme Court recognized
School of Public Health and published by              long ago that laws that impose special
the U.S. Department of Education’s                    financial burdens on the media or a narrow
Higher Education Center, concluded that               sector of the media present a threat to the
“a detailed examination of how rules                  First Amendment. In Grosjean v. Am.
against underage drinking are currently               Press Co., 297 U.S. 233 (1936), Louisiana
enforced reveals a widespread laxity.”                had imposed a special 2% gross receipts

                                                 11
tax on newspapers with circulations of              consumed more than $100,000 worth of
more than 20,000. The Court noted that              paper and ink in a year. This tax, like the
the form of the tax made it plain that its          one in Grosjean, had the effect of favoring
purpose was to penalize and curtail the             small newspapers over large ones, but the
circulation of “a select group of                   Court did not suggest that the Minnesota
newspapers,” namely, as the Court later             legislature had passed the challenged law
pointed out, the state’s large papers, which        in order to retaliate for anything that the
had attacked Governor Huey Long. See                covered papers had said in the past or to
Minneapolis Star & Tribune Co. v.                   influence anything that they might publish
Minnesota Comm’r of Revenue, 460 U.S.               in the future. See id. at 592. Rather, the
575, 579-80 (1983). Holding this tax                Court held that, regardless of the
unconstitutional, the Court wrote:                  legislature’s motives, the state was
                                                    required to show that the disparate
       The tax here involved is bad
                                                    treatment of large and small papers was
       not because it takes money
                                                    needed to serve a compelling state interest,
       from the pockets of the
                                                    id. at 585, and the Court concluded that the
       appellees. If that were all, a
                                                    state had not satisfied this test, id. at 586-
       wholly different question
                                                    92. The Court observed:
       would be in presented. It
       is bad because, in the light                        Whatever the motive of the
       of its history and of its                           legislature in this case, we
       present setting, it is seen to                      think that recognizing a
       b e a d e l ib e r a t e a n d                      power in the State not only
       calculated device in the                            to single out the press but
       guise of a tax to limit the                         also to tailor the tax so that
       circulation of information to                       it singles out a few members
       which the public is entitled                        of the press presents such a
       in        virtue     of     the                     potential for abuse that no
       constitutional guaranties. A                        i n t e r e s t s u g g este d b y
       free press stands as one of                         Minnesota can justify the
       t h e gre at i n t e rp r e t e rs                  scheme.
       between the government and
                                                    Id. at 591-92.
       the people. To allow it to be
       f e t te r e d i s t o f e t t e r                  In Arkansas Writers’ Project, Inc. v.
       ourselves.                                   Ragland, 481 U.S. 221 (1987), the Court
                                                    considered a feature of Arkansas’s gross
Grosjean, 297 U.S. at 250.
                                                    receipts tax. Under the Arkansas scheme,
       In Minneapolis Star, the Court               general interest magazines were subject to
struck down a state law that required               the tax but religious, professional, trade,
publications to pay a use tax if they               and sports journals were exempt. Id. at


                                               12
221, 226. Noting that the Arkansas                                         2.
scheme drew distinctions between
                                                             Under the above cases, laws that
publications based on content, the Court
                                                     impose financial burdens on a broad class
applied strict scrutiny and held that the
                                                     of entities, including the media, do not
scheme was unconstitutional. Id. at 231-
                                                     violate the First Amendment. “It is
32.
                                                     beyond dispute that the States and the
        By contrast, in Leathers v.                  Federal Government can subject [the
Medlock, 499 U.S. 439 (1991), the Court              media] to generally applicable economic
rejected the argument that the Arkansas              regulations without creating constitutional
scheme violated the First Amendment by               problems.” Minneapolis Star, 460 U.S. at
exempting newspapers but not cable                   581. A business in the communications
television. The Court noted that the                 field cannot escape its obligation to
Arkansas tax was “a tax of general                   comply with generally applicable laws on
applicability” that applied to “receipts             the ground that the cost of compliance
from the sale of all tangible personal               would be prohibitive. As TPN I put it, “a
property and a broad range of services.”             newspaper does [not have] a constitutional
Id. at 447. The Court further observed that          right to a certain level of profitability, or
“[t]he tax does not single out the press and         even to stay in business at all.” TPN I, 215
does not therefore threaten to hinder the            F.3d at 366.
press as a watchdog of government
                                                            At the same time, however, courts
activity.” Id. Stating that “there [was] no
                                                     must be wary that taxes, regulatory laws,
indication that Arkansas ha[d] targeted
                                                     and other laws that impose financial
cable television in a purposeful attempt to
                                                     burdens are not used to undermine
interfere with its First Amendment
                                                     freedom of the press and freedom of
activities,” the Court continued: “Nor is
                                                     speech. Government can attempt to cow
the tax one that is structured so as to raise
                                                     the media in general by singling it out for
suspicion that it was intended to do so.”
                                                     special financial burdens. Government
Id. at 448. “Unlike the taxes involved in
                                                     can also seek to control, weaken, or
Grosjean and Minneapolis Star,” the Court
                                                     destroy a disfavored segment of the media
wrote, the Arkansas tax did not “select[] a
                                                     by targeting that segment. Speaking of
narrow group to bear fully the burden of
                                                     the difference be tween genera lly
the tax.” Id. In addition, the Court stated
                                                     applicable tax laws and tax laws that target
that the feature of the Arkansas scheme
                                                     the media or a segment of the media, the
that was then at issue was “structurally
                                                     Supreme Court has explained:
dissimilar” to the feature challenged in
Arkansas Writers’, where “only ‘a few’                      A     power         to   tax
Arkansas magazines paid the State’s sales                   differentially, as opposed to
tax.” Id.                                                   a power to tax generally,
                                                            gives a government a


                                                13
      powerful weapon against the                 unconstitutional if it is “structured so as to
      taxpayer selected. When the                 raise suspicion that it was intended to
      State imposes a generally                   [interfere with protected expression].”
      applicable tax, there is little             Leathers, 499 U.S. at 448. Once the
      cause for concern. We need                  presumption of unconstitutionality arises,
      not fear that a government                  it can be overcome only by showing that
      will destroy a selected group               the challenged law is needed to serve a
      of taxpayers by burdensome                  compelling interest. Minneapolis Star, 460
      taxation if it must impose                  U.S. at 582, 585.
      the same burden on the rest                                        3.
      of its constituency. . . .
                                                          Applying these standards, we hold
      When the State singles out
                                                  that Section 4-498 violates the First
      the press, though, the
                                                  Amendment. To begin, the Act’s structure
      political constraints that
                                                  makes it presumptively unconstitutional.
      prevent a legislature from
                                                  Like the provisions struck down in
      passing crippling taxes of
                                                  Grosjean, Minneapolis Star, and Arkansas
      general applicability are
                                                  Writers’, Section 4-498 singles out a
      weakened, and the threat of
                                                  relatively “small group” of speakers.
      burdensome taxes becomes
                                                  Leathers, 499 U.S. at 447. By its terms,
      acute.     That threat can
                                                  Section 4-498 is limited to media affiliated
      operate as effectively as a
                                                  with educational institutions, and in
      censor to check critical
                                                  practice the scope of the Act is
      comment by the press . . . .
                                                  undoubtedly even narrower. Because
Minneapolis Star, 460 U.S. at 585.                newspapers and other media affiliated with
                                                  elementary and secondary schools are most
        To prevent such abuse, laws that
                                                  unlikely to seek to run alcoholic beverage
impose special financial burdens on the
                                                  ads, Section 4-498 in practice singles out
media or a segment of the media must be
                                                  med ia associated with the
caref ully exami ne d.       A l aw is
                                                  Com mon wealth’s unive r sitie s a nd
presumptively invalid if it “single[s] out
                                                  colleges. Accordingly, the structure of
the press” or “a small group of speakers.”
                                                  Section 4-498 triggers the presumption of
Leathers, 499 U.S. at 447.            This
                                                  unconstitutionality and thus requires the
presumption is not limited to instances in
                                                  Commonwealth to show that the Act is
which there is evidence that the law
                                                  “necessary” to achieve what the Court has
represents a “purposeful attempt to
                                                  described as “an overriding government
interfere with . . . First Amendment
                                                  interest” and an “interest of compelling
activities.” Id. at 448. Even “where . . .
                                                  importance.” Minneapolis Star, 460 U.S.
there is no evidence of an improper
                                                  at 582, 585.
censorial motive,” Arkansas Writers’, 481
U.S. at 228, a law is presumptively                      The     Commonwealth        has    not

                                             14
discharged that obligation. For the reasons        financial burdens that may have the effect
already discussed, the Commonwealth has            of influencing or suppressing speech, and
not shown that Section 4-498 is                    whether those burdens take the form of
“necessary” to discourage underage                 taxes or some other form is unimportant.
drinking or abusive drinking.           The
                                                          The Commonwealth also suggests
Commonwealth has not demonstrated that
                                                   that the tax cases are inapplicable here
Section 4-498 has curbed or promises to
                                                   because the laws struck down in those
curb such drinking to any appreciable
                                                   cases imposed financial burdens directly
degree. Nor has the Commonwealth
                                                   on the media, whereas Section 4-498, as
shown that its worthy objectives cannot be
                                                   interpreted by the LCB, is directly
served at least as well by other means,
                                                   applicable only to advertisers. We reject
such as the diligent enforcement of the
                                                   this argument as well. Much like the
alcoholic beverage laws on and around
                                                   proffered distinction between taxes and
college campuses.
                                                   other financial burdens, this argument
        The Commonwealth contends that             disregards the reason for the presumptive
cases such as Grosjean, Minneapolis Star,          unconstitutionality of laws that impose
and Arkansas Writers’ are inapposite               disparate financial burdens on the media or
because they concerned laws that required          segments of the media. As noted, such
publications to pay taxes, rather than laws        schemes are suspect because they can
that deprived the publications of a source         easily be used as a way of controlling or
of revenue, but this difference is                 suppressing speech. Because a law that
insignificant for present purposes. In             imposes a significant, but indirect,
Simon & Schuster, the state noted that the         financial burden on the media or a segment
Son of Sam law simply required that the            of the media can be used in the same way
funds in question be held in escrow for            and with the same effect, there is no
five years, and the state argued that the          principled reason to draw a distinction
Son of Sam law was therefore quite                 between laws that impose direct and
different from a tax law , which                   indirect burdens of comparable practical
permanently deprives the taxpayer of the           significance.9
money paid. See 502 U.S. at 116-17.
Rejecting this contention, the Court wrote
                                                      9
that “[b]oth forms of financial burden                  We also note that while the Twenty-
operate as disincentives to speak.” Id. at         First Amendment provides the States with
117. Thus, the Supreme Court’s cases               the authority to regulate alcohol, such
concerning disparate taxation of the media         regulation is subject “to the same First
or of a segment of the media apply to other        Amendment restrictions that apply to the
laws that impose other types of disparate          Federal Government.” Rubin v. Coors
financial burdens. The threat to the First         Brewing Co., 514 U.S. 476, 485-86
Amendment arises from the imposition of            (1995); see also 44 Liquormart, Inc. v.
                                                   Rhode Island, 517 U.S. 484, 516-17

                                              15
        As did the TPN I panel, the                 law was part of the state’s overall effort to
Commonwealth relies on AM SAT Cable                 combat monopolies and there was nothing
Ltd. v. Cablevision of Connecticut, 6 F.3d          about the structure of the law at issue in
867 (2d Cir. 1993), and Warner                      that case that gave rise to a presumption of
Communications, Inc. v. City of Niceville,          unconstitutionality.     As stated above,
911 F.2d 634 (11th Cir. 1990), but neither          media are not exempt from generally
case supports the Commonwealth’s                    applicable laws or schemes simply because
position here. In AMSAT, a satellite                they harm the media’s profit. Minneapolis
television company that had an exclusive            Star, 460 U.S. at 581. Section 4-498,
agreement with some apartment buildings             however, is specific to certain media
to provide television service to their              content and specifically targets certain
tenants challenged a state law that required        types of media. It is not part of a generally
apartment building owners to give access            applicable scheme.
to cable and antenna companies that
                                                            The Eleventh Circuit’s decision in
wanted to service the tenants. The satellite
                                                    City of Niceville is even farther afield.
company argued that the state anti-trust
                                                    There, Warner, a leading cable provider,
law was unconstitutional because it would
                                                    claimed that the city’s entry into the
undermine the economic viability of
                                                    market as a competing cable provider
satellite companies. Id. at 871. Rejecting
                                                    violated Warner’s First Amendment rights.
this argument, the Second Circuit held that
                                                    The Eleventh Circuit rejected W arner’s
the satellite company had no First
                                                    claim, holding that the city was entitled to
Amendment right to an exemption from
                                                    enter the market and that Warner had no
the law simply because such a law would
                                                    First Amendment right to be free from
harm the company’s revenue. In AMSAT,
                                                    competition.     Id. at 637-638.        The
there was no evidence that it was a
                                                    argument that the Court rejected in City of
targeted attempt to suppress speech, rather
                                                    Niceville – that the First Amendment
than a generally applicable anti-trust
                                                    protec ts a med ia comp any from
scheme. Id.
                                                    com petition by a state -sponsore d
       AMSAT plainly differs from the               enterprise – simply has no relevance in the
present case in several respects. As far as         present case. Here, the Commonwealth is
the AMSAT opinion reveals, the satellite            not damaging The Pitt News by sponsoring
                                                    a competing publication; it is damaging
                                                    The Pitt News by preventing it, and a small
(1996)(“[W ]e now hold that the                     group of similarly situated media, from
Twenty-first Amendment does not qualify             generating revenue from ads of specific
the constitutional prohibition against laws         content. While there was no indication of
abridging the freedom of speech embodied            intent to suppress speech or harm specific
in the First Amendment.”)                           media in City of Niceville, these elements
                                                    do exist in our case.


                                               16
                   IV.
       For these reasons, we hold that
Section 4-498 violates the First
Amendment as applied to The Pitt News.
We therefore reverse the order of the
District Court and remand for the entry of
a permanent injunction against the
enforcement of Section 4-498 with respect
to any advertisements in that paper.




                                             17
