Court Opinion

ID: 75735
Source: CourtListenerOpinion
Date Created: 2010-04-26 23:31:32+00
Date Added: 2024-06-11T09:33:28.680415
License: Public Domain

[PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS
                                                                FILED
                        FOR THE ELEVENTH CIRCUIT       U.S. COURT OF APPEALS
                                                         ELEVENTH CIRCUIT
                         ________________________          JANUARY 04, 2002
                                                          THOMAS K. KAHN
                                No. 00-14413                   CLERK
                          ________________________

                      D.C. Docket No. 96-01738-CV-RWS-1

ATLANTA JOURNAL AND CONSTITUTION,
USA TODAY, a division of Gannett Satellite
Information Network (“GANSAT”), Inc.,

                                                     Plaintiffs-Appellees,

NEW YORK TIMES COMPANY,
d.b.a. The New York Times,

                                                     Intervenor-Plaintiff,
                                                     Appellee,

                                      versus

THE CITY OF ATLANTA DEPARTMENT
OF AVIATION, ANGELA GITTENS, in her
official capacity as Aviation General Manager,
City of Atlanta, STEVE BAKER, in his official
capacity as Aviation Deputy General Manager,
City of Atlanta, SHIRLEY FRANKLIN, in
her official capacity as Mayor, City of Atlanta,

                                                     Defendants-Appellants.
                          ________________________

                                No. 00-15181
                          ________________________

                      D.C. Docket No. 96-01738-CV-RWS-1

ATLANTA JOURNAL AND CONSTITUTION,
USA TODAY,

                                                     Plaintiffs-Appellees,
NEW YORK TIMES COMPANY,
d.b.a. The New York Times,

                                                     Intervenor-Plaintiff,
                                                     Appellee,
                                      versus

THE CITY OF ATLANTA DEPARTMENT
OF AVIATION, ANGELA GITTENS, in her
official capacity as Aviation General Manager,
City of Atlanta, STEVE BAKER, in his official
capacity as Aviation Deputy General Manager,
City of Atlanta, SHIRLEY FRANKLIN, in
her official capacity as Mayor, City of Atlanta,

                                                     Defendants-Appellants.

                          ________________________

                                No. 00-15185
                          ________________________

                      D.C. Docket No. 96-01847-CV-RWS-1

                                         2
USA TODAY, a division of Gannett Satellite
Information Network (“GANSAT”), Inc.,

                                                                   Plaintiff-Appellee,

NEW YORK TIMES COMPANY,
d.b.a. The New York Times,

                                                                   Intervenor-Plaintiff,
                                                                   Appellee,

                                             versus

THE CITY OF ATLANTA DEPARTMENT
OF AVIATION, ANGELA GITTENS, in her
official capacity as Aviation General Manager,
City of Atlanta, STEVE BAKER, in his official
capacity as Aviation Deputy General Manager,
City of Atlanta, SHIRLEY FRANKLIN, in
her official capacity as Mayor, City of Atlanta,

                                                                   Defendants-Appellants.

                               ________________________

                      Appeals from the United States District Court
                          for the Northern District of Georgia
                            _________________________

                                      (January 4, 2002)

Before BLACK, HILL and STAPLETON*, Circuit Judges.

______________________
*Honorable Walter K. Stapleton, U.S. Circuit Judge for the Third Circuit, sitting by designation.
HILL, Circuit Judge:

                                                3
      In 1996, the City of Atlanta, through its Department of Aviation,

implemented a new plan regulating news racks at Hartsfield Atlanta International

Airport. The Atlanta Journal and Constitution, later joined by the New York

Times and USA Today, brought this action seeking a declaration that the plan

unconstitutionally deprived it of its rights under the First Amendment and an

injunction against enforcement of the plan. In July of 2000, upon consideration of

cross-motions for summary judgment, the district court declared the plan

unconstitutional and issued a permanent injunction barring the City of Atlanta and

the Department of Aviation from enforcing it. This appeal followed.

                                         I.

      Hartsfield Atlanta International Airport is one of the nation’s busiest

airports. Nearly 64 million passengers travel through the City of Atlanta’s (the

“City”) airport each year. An additional 15 million people visit the airport

annually when accompanying departing passengers or greeting those who arrive.

Some 35,000 to 45,000 people work at the airport. The airport consists of a main

passenger terminal and six concourses, along which a variety of vendors offer their

goods and services. News racks, owned by the Atlanta Journal and Constitution

(the “AJC”) as well as other newspapers, were operated by them as concessions.

                                          4
      In 1995 and 1996, the airport underwent a major renovation. Along with the

renovation, the airport intensified its efforts to operate as more of a business entity.

The City delegated to the Department of Aviation (the “Department”) authority

over the news racks.

      As the 1996 Olympics approached, city officials developed a partnership

with the Coca-Cola Company (“Coca-Cola”) whereby the city would receive a

subsidy for its arts programs in exchange for allowing Coca-Cola to maintain a

commercial display area in the airport’s atrium and to occupy prime retail space in

that area without going though the usual bidding process. In looking for more

ways to promote Coca-Cola and its downtown “Olympic City” commercial

attraction, the City and Coca-Cola agreed that news racks in the airport would bear

Coca-Cola advertising. Representatives of Coca-Cola selected twelve locations for

the sixty-four news racks.

      In April of 1996, the Department announced it was formulating a plan to

replace privately-owned racks in the terminal with city-owned news racks and that

this new plan would go into effect on July 1, 1996. The City’s 1996 plan had four

essential parts. First, the City would own the new racks. Second, the news racks

were part of an airport promotion in conjunction with the 1996 Olympic Games

and Coca-Cola was to play a major role in the Olympic promotion. Accordingly,

                                           5
the new racks were to display advertisements for Coca-Cola. The plan prohibited

the publishers of newspapers to display their own logos or advertisements on the

news racks. Third, publishers selected to use the city-owned news racks were

required to pay a $20 per month charge. Finally, the Department’s decision to

grant a permit for a publisher to use a news rack would be based on its “desire” to

have a diversity of viewpoints in the airport; the Department could cancel a permit

on thirty days notice without cause.

      It is undisputed that the City conducted no study of news rack sales nor any

issue relating to safety, security, aesthetics, passenger flow or any other

justification for the plan. It is also undisputed that the selection of the news racks

and their locations and numbers was delegated to Coca-Cola.

      On July 5, 1996, the AJC installed its own news racks in the atrium and

vestibule areas of the newly-renovated airport terminal. The Department

confiscated the racks, citing the AJC’s failure to secure a permit and claiming the

positioning of the racks might constitute a fire code violation.

      On July 9, 1996, AJC filed this action and moved for a temporary restraining

order and a preliminary injunction. Following a hearing the next day, the district

court entered a preliminary injunction prohibiting the City from enforcing its news

rack leasing program.

                                           6
      On July 11, 1996, AJC again placed news racks at the airport. Department

officials, however, again removed the racks, after the AJC refused to sign a permit.

AJC returned to the district court, which amended its previous order by enjoining

the Department from removing the news racks. The court also ordered that the

method of news rack distribution in place prior to the City’s enactment of the new

distribution plan was to remain in effect for the duration of the preliminary

injunction.

      The Department then took the position that placement of news racks on

airline concourses depended on securing permission from the relevant airline.

After AJC secured permission from Delta Airlines to place its racks on their

concourses, the Department revoked AJC’s security clearance and required that it

have a security escort to deliver papers to its news racks on the Delta concourses.

In an emergency hearing, the district court ordered the Department to permit AJC

to deliver its papers. After the Department continued to require the publishers to

be escorted, the district court, in yet another emergency hearing, told the

Department that it was coming “perilously close to criminal contempt.” After

some final skirmishing, the Department ceased its efforts to prevent AJC from

distributing its papers on its own racks and, since that time, AJC has continued to

sell their papers through their own news racks. The other two plaintiffs, USA

                                          7
Today and The New York Times Company (all three, collectively, the

“publishers”), subsequently joined this lawsuit.

      In its order of July 2000, the district court granted summary judgment to the

publishers, holding that the plan was constitutionally defective in at least three

respects, and permanently enjoining its enforcement.

      We review the district court’s grant of summary judgment and application of

the law de novo. Fernandez v. Bankers Nat’l Life Ins. Co., 906 F.2d 559, 564 (11th

Cir. 1990). We review the grant of a permanent injunction for an abuse of

discretion. Wesch v. Folsom, 6 F.3d 1465, 1469 (11th Cir. 1993).

                                          II.

      “It is well settled that the right to distribute newspapers through news racks

is protected under the First Amendment.” Gold Coast Publications, Inc. v.

Corrigan, 42 F.3d 1336, 1343 (11th Cir. 1994). The government may, however,

limit that right in a non-public forum, such as an airport. International Soc. for

Krishna Consciousness, Inc. v. Lee, 505 U.S. 672, 679 (1992); ISKCON Miami,

Inc. v. Metropolitan Dade County, 147 F.3d 1282, 1286 (11th Cir. 1998).

      In a non-public forum, restrictions on speech are permissible so long as they

are viewpoint-neutral and reasonable. Perry Educ. Ass’n v. Perry Local

Educators’ Ass’n, 460 U.S. 37 (1983). “The reasonableness of the Government’s

                                           8
restriction of access to a non-public forum must be assessed in the light of the

purpose of the forum and all the surrounding circumstances.” Cornelius v. NAACP

Legal Defense and Educational Fund, Inc., 473 U.S. 788, 809 (1985). When the

government chooses to restrict speech, its actions cannot be “arbitrary, capricious

or invidious,” United States v. Kokinda, 497 U.S. 720, 725-26 (1990), and it bears

the burden of proving that they are not. United States v. Playboy Entertainment

Group, Inc., 529 U.S. 803, 120 S. Ct. 1878, 1881 (2000).

       The district court held that the Department’s plan violates the First

Amendment because it impermissibly (1) discriminates between speech based

upon viewpoint and content; (2) imposes a fee unrelated to administrative costs on

a protected expressive activity – the sale of news papers through news racks; and

(3) vests unbridled discretion, and therefore broad censorial power, in the

administrators of the plan. We agree.

1.     Use of News racks Bearing Coca-Cola Advertisements1

       1
          We agree with the publishers that this issue is not mooted because the Olympics are
over. The City has never officially withdrawn any aspect of the 1996 plan, never represented
that it has abandoned this aspect of the plan, nor conceded that it unconstitutionally compelled
speech. The City may not “moot” an issue by making promises in legal briefs that it has ceased
the activity in question, particularly when it continues to maintain the restriction is
constitutional. See Jager v. Douglas County Sch. Dist., 862 F.2d 824, 833-34 (11th Cir. 1989)
(voluntary cessation of conduct does not “moot” issue of constitutionality of that conduct).

                                                9
      The Department’s plan limits the kind of speech it will tolerate on airport

news racks. Under the plan, a publisher wishing to sell newspapers on news racks

in the airport is required to lease government-owned news racks, all of which carry

advertisements for Coca-Cola . No other logo or advertising is permitted. The

district court held that this requirement impermissibly burdens a protected

expressive activity – selling newspapers. First, it compels some speech – the

publishers must sell their papers on racks which endorse Coca-Cola. Second, the

requirement discriminates among the viewpoints of potential speakers, by

permitting some and prohibiting others.

      Even if it is constitutional for government to ban advertisements on its news

racks completely, once it permits some commercial speech to be exhibited there, its

prohibition of all other commercial speech “raises the danger of content and

viewpoint censorship.” City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750,

751 (1988). Even in a non-public forum, viewpoint discrimination is

impermissible, Lee, 505 U.S. at 679, and, although “government may draw

distinctions based upon content in order to preserve government property for its

intended uses,” ISKCON Miami, Inc., 147 F.3d at 1288 n.5, the district court held

that there was no principled reason based upon the purpose of the airport to justify

distinguishing between commercial speakers on the City’s news racks. The City’s

                                          10
desire to foster its relationship with Coca-Cola was insufficiently compelling to

permit it to require the publishers to associate their publications with Coca-Cola

products and to prohibit them from displaying their own logos or advertisements.

We find no error in this conclusion.

2.    The Licensing Fee

      The Department’s 1996 plan imposes a $20 per month fee for the use of each

news rack. The publishers contend that the fee is illegal since it has long been

established that government may not profit by imposing licensing or permit fees on

the exercise of First Amendment rights. See Murdoch v. Pennsylvania, 319 U.S.

105 (1943); Cox v. New Hampshire, 312 U.S. 569, 577 (1941). While a fee to

defray the administrative costs of a licensing scheme is permissible, government is

prohibited from using such a fee to raise revenue under the guise of defraying

administrative costs. Id.

      The Department contends, however, that it should be allowed to charge a

revenue-raising licensing fee, even on a protected activity, if it is acting in a

“proprietary,” as opposed to a “governmental,” capacity. The Department relies

upon Gannett Satellite Information Network, Inc. v. Metropolitan Transp.

Authority, 745 F.2d 767 (2d Cir. 1984). In that case, the Second Circuit approved

                                           11
a revenue-generating fee on news racks in the Metropolitan Transport Authority’s

(the “MTA”) subway stations in New York, holding that:

      Ordinarily, a government cannot profit by imposing licensing or
      permit fees on the exercise of a Fist Amendment right. Only fees that
      cover the administrative costs of the permit or license are permissible.
      In those cases in which licensing fees were prohibited, however, the
      government was acting in a governmental capacity and was raising
      general revenue under the guise of defraying its administrative costs.

Id. at 774 (citation omitted). Distinguishing “governmental” from “proprietary”

capacity, the Second Circuit held that as the operator of a commuter rail business,

the MTA was entitled to impose a revenue-raising licensing fee on concessionaires,

even those engaging in a protected expressive activity – the selling of newspapers.

According to the court, when government acts in this proprietary capacity, its

licensing fees are “permissible manner restrictions which serve the significant

governmental interest of raising revenue for the self-sufficient, efficient operation

of commuter lines.” Id. at 775; see also Jacobson v. City of Rapid City, S. D., 128

F.3d 660 (8th Cir. 1997) (city acted in proprietary capacity, thus was justified in

banning private news racks from airport based on its legitimate interest in

generating revenue). The City urged the district court to adopt this distinction and

permit it, as proprietor of the airport, to charge a revenue-raising fee for the use of

its news racks.

                                           12
      The district court, however, rejected this distinction because it appears to be

foreclosed by the law of this circuit. In Sentinel Communications Co. v. Watts, 936

F.2d 1189 (11th Cir. 1991), we were called upon to decide, upon very similar facts,

whether a revenue-generating licensing fee on protected expressive activity was

constitutional. The case involved a challenge to a Florida scheme to regulate news

racks in its highway rest areas. As a condition on placing news racks in the rest

areas, publishers were required to agree to pay a five cent “administrative” fee for

each paper sold. The district court had held that the fee was a “valid and

reasonable contractual condition[ ] on Sentinel’s placement of its news racks at the

rest area.” Id. at 1205.

      We disagreed, holding:

      First, it is well established that a licensing fee is permissible, but a
      state or municipality may charge no more than the amount needed to
      cover administrative costs. The government may not profit by
      imposing licensing or permit fees on the exercise of first amendment
      rights, and is prohibited from raising revenue under the guise of
      defraying its administrative costs.

Id.

      In Sentinel, the state of Florida undertook to build state-run gift shops in its

rest areas. While the facilitation of highway travel is the primary purpose of these

rest areas, Florida clearly had an interest in generating revenue from sales at these

                                          13
gift shops. Commercial activity benefitting the state became a secondary intended

purpose of the rest areas, and Florida made an effort to maximize its revenues by

charging publishers for the privilege of selling their newspapers in the gift shops.

Even though these fees were imposed at a non-public forum with a significant

commercial purpose, at which the government – as proprietor of the rest area and

gift shops – clearly sought to raise money to offset the cost of running the facility,

we held that they were unconstitutional if they were unrelated to the costs of

administering the licensing scheme. Id.

       We find the facts of this case indistinguishable from those in Sentinel. Like

the state of Florida, the Department operates a non-public forum – the airport –

which is designed to facilitate travel. A clear secondary purpose of the airport,

however, is commercial activity, much of which is designed to benefit the City and

the Department by offsetting the costs of running the airport. The district court

found, and we agree, that the news rack fees, as in Florida, were imposed without

regard to administrative cost,2 and were for the purpose of raising revenue. The

facts being indistinguishable, the rule of Sentinel appears to preclude the City from

       2
          The Department argues that it did introduce such evidence when it put in evidence of the
prices the papers pay to have their products in shops and the rates it charges for retail space. The
district court held this was evidence of the costs of doing business, not the costs of administering
a licensing scheme. We find no error in this conclusion.

                                                14
charging the publishers a revenue-raising fee for engaging in the expressive

activity of selling newspapers.

      The City seeks to distinguish Sentinel, contending that it does not apply.

The City argues that Sentinel does not foreclose a “proprietary” capacity defense

for the news rack fee since this distinction was not specifically addressed and

rejected there. While we agree that Sentinel does not address the “proprietary”

capacity defense for such fees, the Department’s argument that it does not

foreclose that defense here runs afoul of our decision in Smith v. GTE Corp., 236

F.3d 1292 (11th Cir. 2001).

      In Smith, we held that “the mere act of proffering additional reasons not

expressly considered previously . . . will not open the door to consideration of the

question by a second panel.” Id. at 1302-03 (quoting United States v. Bascaro, 742

F.2d 1335, 1343 (11th Cir. 1984)). This is exactly what the City seeks to do here.

It advances an additional reason – not considered by us in Sentinel – in support of

its position that a revenue-raising licensing fee on protected expressive activity can

be constitutional. The City proffers the additional reason that a revenue-rasing

licensing scheme does not offend the Constitution if it is imposed by government

acting in a proprietary, as opposed to governmental, capacity.

                                          15
       Were we writing on a clean slate we might well be persuaded of the merits

of the governmental versus proprietary distinction advanced by the Department and

adopted in at least two other circuits. Under Smith, however, we are foreclosed

from reconsidering the holding of Sentinel for this new reason. Even though we

did not expressly reject a “proprietary” capacity distinction in Sentinel, we held

there that government may not raise revenue through a licensing fee on protected

expressive activity. 936 F.2d at 1205. Only this court sitting en banc, can

reconsider this holding.3 Perhaps this will occur. For now, however, the fee

imposed by the Department’s 1996 plan is unconstitutional and may not be

enforced.

3)     Unbridled Discretion

       Finally, the Department’s plan also grants unbridled discretion to airport

personnel to choose which publications are granted access to the city-owned news

racks, and to cancel a publisher’s news rack license at will. The only guidance

offered to the officials administering the plan is the “desire of the Department of

Aviation to present a diversity of publications in a coherent manner.” It is clear

that this “desire” not only permits, but in fact compels, the official to discriminate

       3
        Sentinel, read with Smith, produces a situation where our court’s first consideration of an
issue might well be by the court sitting en banc; although not argued by the parties nor,
therefore, reached by the court, the governmental versus proprietary distinction was subsumed
by the holding of Sentinel, and cannot, under Smith, be “resurrected” by our panel.

                                                16
among viewpoints based specifically upon the viewpoint itself. The district court

held that this kind of discretion is facially unconstitutional and we agree.

      Once again, Sentinel controls. There we explained that:

      A court may invalidate an excessively broad grant of discretion on its
      face, without regard to the particular facts of the plaintiff’s case,
      because the very existence of the discretion lodged in the public
      official is constitutionally unacceptable. By facially invalidating
      broad grants of discretion, the Supreme Court has revealed that the
      problem [with such discretion] is not potential abuses, but the very
      existence of broad censorial power.

936 F.2d at 1197.

      The Supreme Court has invalidated similar city ordinances which vested

broad discretion in its personnel to control expressive activity. Lakewood, 486

U.S. at 769. In Lakewood, the Court invalidated an ordinance which gave the

mayor the authority to deny applications for permits to place news racks on public

property. In striking down the ordinance, the Court noted that “the face of the

ordinance itself contains no explicit limits on the mayor’s discretion.” Id.

      Similarly, the Department’s plan contains no explicit limits on airport

personnel’s power to cancel news rack licenses. On its face, the plan permits the

Department to cancel a publisher’s license for any reason whatsoever, including

unconstitutional reasons such as viewpoint discrimination. Such unbridled

discretion vests broad censorial power in government and this the Constitution

                                          17
does not permit. Id.; Sentinel, 296 F.2d at 1197. We find no error in the district

court’s conclusion that this aspect of the City’s 1996 plan is unconstitutional and

may not be enforced.

                                         III.

      The Department’s plan impermissibly compels some speech, prohibits other

speech based upon its viewpoint, imposes a revenue-raising fee on protected

speech, and vests in government an unfettered discretion to discriminate among

speech based upon viewpoint and content. The district court correctly held that

this plan violates the Constitution. The grant of a permanent injunction

prohibiting the City and the Department from enforcing this unconstitutional plan,

therefore, was not an abuse of discretion. Accordingly, the judgment of the district

court is

      AFFIRMED.

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