## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 92-3182

___________ Harlan L. Jacobsen, *

Plaintiff - Appellee, *

v. * District Court for the City of Rapid City, South Dakota; * William Bacon, Airport Administrator, *

Defendants - Appellants. * *

* Appeal from the United States

* District of South Dakota.

*

___________ Submitted: June 12, 1996 Filed: October 22, 1997

___________ Before LOKEN, JOHN R. GIBSON, and HANSEN, Circuit Judges.

___________ LOKEN, Circuit Judge.
The City of Rapid City, South Dakota, and Airport Administrator Wil liam Bacon (collectively, “the City”) appeal a district cour t order permanently enjoining them from banning Harlan L. Jacobsen’s newspaper vending machines, or newsracks, from th e Rapid City Regional Airport terminal. The City argues that its policy regardin g newsracks is reasonable and therefore does not violate Jacobsen’s First Amendmen t rights. Although we find most of the City’s reasons for banning newsracks-2-

unpersuasive, we conclude that the record does not support an injunction against the revenue-raising aspect of its policy. Therefore, we reverse. The Airport opened a new terminal in 1988. The upper level has a secur e
con course area for boarding and exiting airplanes, and a preconcourse area tha t includes a gift shop, restaurant, lounge, public rest areas, and public telephones. The lower level contains customer service areas for airlines, limousines , and rental cars, and the baggage claim area.
The Airport generates revenues through l anding fees, parking lot fees, rental car company revenues , and rents and charges to other terminal tenants. One who wishes to use terminal space for commercial activi ty must be approved by the City’s Regional Airport Board and enter into a written lease. See S.D. C ODIFIED LAWS § 50-7-3.

Jac obsen publishes Solo RFD , a monthly newspaper providing services an d advice to single people. He pr efers to distribute Solo RFD through newsracks. There
was a Solo RFD newsrack at the Airport ’s prior terminal for two or three years. After the new terminal opened, Jaco bsen placed a newsrack in a public area of the terminal without seeking the City’s permission. Eight or nine months later, Bacon removed the newsrack to a nonpublic conference room. When Jacobsen complained, Ba con advised that it wa s Airport policy that newspapers be sold through the gift shop because “i f things were to be sol d in the airport there would have to be some revenue generated.” Bacon suggested that if Jacobsen wished to sell his newspapers at the Air port he should contact the gift sho p. Jacobsen instead filed this lawsuit, alleging that the Airport is a public forum and therefore banning newsracks violates his First Amendment rights.

At the time of the one-day trial, there were no other commercial newsracks i n the n ew terminal. The City had denied two other newspapers permission to plac e
newsra cks in the terminal. One, USA Today , then distributed through the gift shop

. The Rapid City Chamber of Commerce had been granted permission to place a-3-

newsrack in the terminal to distribute free literature. Disagreeing with Jacobsen, the district court held that the Airport is a nonpublic forum. However, the court concluded tha t the City’s ban on commercial newsracks was not a constitutionally reasonabl e restrictio n

on speech because the City failed to prove that its asserted interests i n operation al efficiency, safety, security, aesthetics, and revenue justified the ban. The court permanently enjoined the City “from enforcing a total ban of [Jacobsen's ] newsracks f

rom the Rapid City Airport.” The City appeals. We review th e constitutionality of its policy de novo
. See Bose Corp. v. Consumers Union, Inc. , 466 U.S. 485, 508-09 (1984).

I.
The First Amendment protects both the publi cation and distribution of protected material, even if the method of distribution involves public property. See , e.g. , City of Cincinnati v. Discovery Network, Inc. , 507 U.S. 410, 430-31 (1993) (invalidating ban on news racks on public property). The extent to which government ma y constitutionally restrict protected express ion on public property depends upon whether th atproperty is a traditional public forum, a designated public forum, or a nonpubli c forum. As the district cou rt recognized, a public airport terminal is a nonpublic forum for First Amendment purposes. See International Soc'y for Krishna Conscio usness, Inc. v. Lee , 505 U.S. 672, 680 (1992). Accordingly, the City ’s newsrack policy "need only be reasonable, as long as [it] is not an effort to suppress the speaker's activity due to disagreement with the speaker's view." Id. at 679.

"The reasonableness of the Government's restriction of access to a nonpubli c forum must be assessed in the light of the purpose of the forum and all the surrounding ci rcumstances." Cornelius v. NAACP Legal Defense & Educ. Fund, Inc. , 473 U.S

. 788, 809 (1985). The City contends that its interests in airport maintenance, safety , secu rity, operational efficiency, aesthetics, and revenue justify its policy regardin g commercial newsracks in the terminal. As the district court noted, these are legitimate-4-

governmental interests that the City may promote through reasonable mean s. See Clark v. Community for Creative Non-V iolence , 468 U.S. 288, 297-99 (1984) (maintenance and public safety); Members of the City Council v. Taxpayers for Vincent , 466 U.S. 789, 805 -07 (1984) (aesthetics); Heffron v. International Soc'y for Krishn a Consciou sness, Inc. , 452 U.S. 640, 650 (1981) (public safety); Jamison v. City of St. Louis , 828 F.2d 1280, 1285 (8t h Cir. 1987) (security and operational efficiency), cert. denied , 4 85 U.S. 987 (1988); Gannett Satellite Info. Network, Inc. v. Metropolita n Transp. A uth. , 745 F.2d 767, 775 (2d Cir. 1984) (revenue). However, w ith th e exception of its revenue rationale, which we will discuss in Part II, we agree with the district court that the evidence does not substantiate the City’s purported reasons for banning commercial newsracks in the Airport terminal:
-- The City’s contention tha t newsracks interfere with Airport maintenance was
s u pported only by vague hearsay testimony of complaints by Airport cleaning crews.

-- The City’s concern that newsracks are unstable or top heavy was no t supported by evidence of injury from Jacobsen's newsracks. Design safety concerns should be addressed through "time, place, and manner" restrictions, not a total ban.

-- As to Airport security, the City's witnesses speculated that newsracks could be used to conceal a bomb. The district court concluded that this rationale was mere pretext because the terminal has many other places where a bomb could be hidden , such as waste containers and plant holders , and if anything, the glass door on the front of a newsrack makes it a less suitable place to hide a bomb. See Multimedi a Publ'g Co.
v. Greenville-Spartanburg Airport Dist. , 991 F.2d 154, 162 (4th Cir. 1993) (labelin g this security concern about newsracks specious).
-- The City claimed that newsracks in the terminal will negatively affect Airport operations, but t he district court found that, even in high-traffic areas, the newsracks are sufficiently removed from pedestrian traffic to avoid obstructing or impeding-5-

travelers. See Lee v. International Soc'y for Krishna Consciousness, Inc. , 505 U.S

. 830, 831 (1992) ( severe congestion at New York City airports did not justify a tota l ban on leafleting).

-- The City opined that newsracks detract from Airport decor, but the distric t court found that the appearance of Jacobsen's new srack was not incompatible. Airport dec or may be regulated but would rarely if ever justify a total ban on protected Firs t Amendment activity.

Lo oking at the issue more broadly, there is simply no evidence that placin g Jacobsen's newsracks in public portions of the terminal wi ll interfere with the Airport's princip al intended use, to facilitate air travel. Moreover, a s the City recognized b y leasing termin al space to a gift shop, a restaurant, and a lounge, a certain amount o f commercial retail activity is consistent with the intended uses of an airpor t terminal, and making newspapers reasonably available to air travelers is a compatible commercia l activity

. See Lee , 505 U.S. at 688-89 (O'Connor, J., concurring); Multimedi a Publishing , 991 F.2d at 163. Newsracks are common in airport terminals, and Jacobsen has operated a newsrack in both Rapid City terminals without incident. II. During the period in questi on, the City had granted the gift shop concessionaire the ex clusive right to sell various consumer products in the new terminal, includin g “books, magazines, [and] newspapers.” Under the five-year Lease and Concessio n Agreemen t , the concessionaire paid the City a fixed annual base rent of $5.25 pe r square foot for leased terminal space, plus the g reater of a minimum annual concession fee or eight percent of the gift shop’s gross revenues, pl us the gift shop’s pro rata share of Airport utility and energ y costs. If the City must allow Jacobsen and other vendors to sell F irst Amendment protected materials in newsracks outside the gift shop, th e concessionaire will lose revenues, making its exclusive contract less valuable. That in turn will reduce the City’s leverage in bargaining for terms such as minimum annualOn t his issue, Multimedia Publishing is distinguishable because there was n o 1 proof of lost revenue. In addition, the court’s assertion that imposing a charge fo r newsracks is a “simple” alternative for the airport, 991 F.2d at 161 , is overly simplistic.

-6- concession fees and pro rata utility charges. See Gannett Satellite Info. Network, Inc. v. Berger , 716 F. Supp. 140, 151-52 (D.N.J. 1989), rev'd in part on other grounds , 894 F. 2d 61 (3d Cir. 1990). The City argues that this revenue interest justifies its polic y regarding commercial newsracks in the terminal.

This revenue issue is real and complex. From a proprietary perspective, it i s presumptively reasonable for the manager of a small airport to conclude that granting one gift shop concessionaire the exclusive right to sell consumer pr oducts in the terminal will both maximize that type of leasing revenues and minimize leasing costs by eliminating the need to negotiate with many different types of vendors. As any frequent air traveler kno ws, large airports typically make a different decision, opting for retailing diversity. But these are decisions better made by airport managers than federa l judges. Thus, there is a cos t, at least in decision-making autonomy, in deciding that the First Amendmen t precludes the City from enforcing its exclus ive contract with the gift shop by refusing to allow commercial newsracks in the terminal. 1
On the other side of the reasonableness equation, Jacob sen presented no evidence at tr ial of the impact that selling Solo RFD in the gift shop would have on its sales and circulation in the Airport termin al. All we have on this issue is Jacobsen’s unsupported
asse rtion: “The only thing that we found that works in a consistent basis and i s economically feasible is basic newsrack sales.” And that tes timony was directed at Solo RF D distribution generally. Jacobsen did not claim that he has unsuccessfully trie d distributin g at a small airport’s exclusive gift shop -- where one seller serves a geograph ically captive market. Nor did he present data comparing Solo RFD sale s through gif

t shops versus newsracks in locations comparable to the Rapid City AirportThe district court held that the City’s rationale is inconsisten t with cases holding 2 “that the government may not profit by imposing a fee on a First Amendment right.” However, those cases involved fees imposed by the government acting as sovereign. See Jacobsen v. Harris , 869 F.2d 1172, 1174 (8th Cir. 1989); Jacobsen v. Crivaro , 851 F.2d 1067, 1071 (8th Cir. 1988). When a newspaper leases public property fo r commercial us e, the First Amendment does not strictly limit the rent government may charge to its fully allocated costs as landlord. If government is acting in a legitimate proprietary capaci ty, the relevant questions are whether a purportedly reasonable rent is a pretext for discrimination against protect ed First Amendment activity, and whether the re nt unreasonably precludes such activity in light of the government’s proprietary interest. See Gannett , 745 F.2d at 774-75. -7- terminal. The gift shop concessionaire testified that he was willing to sell Solo RFD in the gift shop, which is open fifteen of the sixteen hours per day that the Airport i s open to the public . On this record, the district court’s finding that the gift shop is not a “viable alternative channel[] for the sale of Jacob sen’s newspapers” was speculation, unsupported by the evidence, and based primarily on the court ’s mistaken view that the City is not entitled to “profit” from newspaper sales. 2

Jacobsen tried this case on the premise that the Rapid City Airport terminal i s
a public forum and he therefore had an absolute First Amendment right to free use of the terminal for his newsracks . This was a faulty premise . The Airport is a nonpublic forum, a nd the City has a legitimate revenue interest in operating the Airport

. Rest rictions furthering that interest must be reasonable but need not be the mos t reasonable restrictions. See United States v. Kok inda , 497 U.S. 720, 730 (1990) . Nor does the First Amendment grant Jacobsen a right to the most cost-effective means of expressi on or distribution. See Gannett , 745 F.2d at 774. We are aware tha t newsracks are an effective means of distribution, “especially for low-budget , con troversial” newspapers. City of Lakewood v. Plain Dealer Publ'g Co. , 486 U.S

. 750, 762 (1988). The City must take that into account in implementing its newsrack policy. However, the City’s policy thus far “has not b een shown to deny access within the forum.” Heffron , 452 U.S. at 655. Until Jacobsen comes forward with concrete-8-

evidence that the City’s facially reasonable policy regar ding distribution of newspapers at the Rapid City Airport either is intended to discriminate or unreasonably fails t o provide Solo RFD a viable means of airport dist ribution, he is not entitled to injunctive rel ief interfering with the City’s proprietary revenue interest in operating the Airpor t for the benefit of air travelers.

The judgment of the district court is reversed, and the case is remanded wit h directions to dissolve the permanent injunction.
JOHN R. GIBSON, Circuit Judge, concurring in part and dissenting in part.
I concur in Part I of the court's opinion.

I dissent from Part II for the reason that it places the burden on Jacobsen with respec t to the City's policy restricting his speech. Perry Ed. Assn. v. Perry Local Ed. Assn. , 460 U.S. 37, 45-46 (1983) places this burden on the City.
A true copy.

Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.