The opinion of the court was delivered by: MCCURN
In one of the early Supreme Court cases involving what would now be called "commercial speech", the majority and two dissenting Justices were in confident agreement that a seller of mere "pots" or "gadgets or brushes" could claim no First Amendment protection for the hawking of such wares. Breard v. City of Alexandria, La., 341 U.S. 622, 641, 650, 95 L. Ed. 1233, 71 S. Ct. 920 n.* (1951). Since that time, the scope of protection accorded to commercial speech has expanded greatly, though by no means steadily. In this suit the Court must apply current commercial speech doctrine to the merchandizing of cookware.
American Future Systems, Inc. (AFS) is a corporation whose principal business is the sale of cookware, china, crystal, and silverware to college students through group demonstrations of its merchandise. It has brought this action for declaratory and injunctive relief against the State University of New York at Cortland (SUNY Cortland) and various state officers who have refused to permit it to conduct product demonstrations in campus dormitory rooms, even when invited to do so by students. AFS asserts that SUNY is thereby depriving it of its right to free speech. Kathleen Rapp, a representative of AFS and co-plaintiff, joins in that assertion. Todd Fox, a student who was denied permission to "host" one such demonstration, also a co-plaintiff, claims a deprivation of his rights of speech, privacy, and association. Claims under the due process and equal protection clause and the search and seizure clause are also asserted, as are pendent claims under the constitution and laws of New York State.
Presently before the Court is plaintiffs' motion for a preliminary injunction permitting them to conduct their demonstrations at SUNY Cortland without interference pendente lite. In support of the motion, plaintiffs have furnished the Court with an extensive set of affidavits and exhibits, documenting the manner in which AFS conducts its business, the opinion of particular students and academicians as to the value of those demonstrations, and the events which preceded the commencement of this suit.
Although the defendants have by no means conceded all of the factual allegations of the plaintiff, they have taken the position that an evidentiary hearing is not necessary for determination of this motion since the allegations fail to entitle plaintiffs to any relief, preliminary or permanent, as a matter of law. They have, however, submitted one affidavit from a SUNY official, explaining the purpose of the challenged policy.
The primary dispute between the parties is one of law. The Court considers itself to be adequately apprised of the factual setting by the affidavits and the exhibits to make a determination of this motion without need for an evidentiary hearing. See, Herbert Rosenthal Jewelry Corp. v. Grossbardt, 428 F.2d 551, 554 (2d Cir. 1970). For the reasons set forth below, we hold that (1) plaintiffs are likely to prevail on their claim that SUNY may not, consistent with the First Amendment, completely prohibit AFS from disseminating information about its products through group demonstrations in dormitory rooms when invited to do so by a student-resident; but that (2) plaintiffs are not likely to prevail on their claim that SUNY may not lawfully prohibit the consummation of sales at the conclusion of any such group demonstration.
AFS presents its product demonstrations to groups of ten or more students in private student dormitory rooms upon invitation by a student residing in that room. The "student host" who invites the AFS representative, brings together with prospective customers, and provides use of his or her dormitory room for the demonstration, is given certain "incentives" for performing such services.
AFS emphasizes that the demonstrations are informative and educational in that they teach students much about the products and also about sales. Purchases are made, usually by credit agreements, at the conclusion of the demonstrations.
The Board of Trustees of SUNY has implemented the following regulation challenged here:
No authorization will be given to private commercial enterprises to operate on State University campuses or facilities furnished by the University other than to provide for food, campus bookstore, laundry, dry-cleaning, barber and beauty services, and cultural events.
Resolution No. 66-156 as amended by 73-56. SUNY interprets this policy to bar AFS from conducting its demonstrations on all SUNY campuses.
The inevitable confrontation unfolded as follows: A representative conducting a demonstration in a dormitory room on October 17, 1982, was told to leave by the Resident Director and then the campus police; she did so. The following day, the AFS Regional Director, Kathleen Rapp, entered the dormitory to give a demonstration upon invitation by a student. As set forth in Ms. Rapp's affidavit, the dormitory director came into the room at the order-taking stage of the presentation, and told Rapp to leave the premises. Rapp replied that she had a constitutional right to stay. The campus police arrived and again told the representative to leave, and she again refused.
The officers then arrested Rapp on charges of loitering and soliciting without a permit. A charge of trespass was later added.
Subsequently, another student -- the plaintiff Todd Fox -- agreed to host an AFS presentation in his dormitory room. He first requested permission from defendant Raymond Franco, Director of Resident Life at SUNY Cortland. Franco responded by a letter denying Fox permission to host the demonstration and stating that legal action, other than arrests, would be taken if any such demonstration were held.
This suit was commenced on December 2, 1982. Defendant has filed an Answer asserting, primarily, the defense that "there is no constitutional or other right to conduct commercial activities in public facilities and in University dormitories or residence halls in particular", and that there is a substantial state interest in barring such activities.
AFS is currently prosecuting a similar suit in federal court against Pennsylvania State University, and has, after extensive litigation, secured a narrow preliminary injunction whereby the named student-plaintiff may host product demonstrations pendente-lite. American Future Systems, Inc. v. Pennsylvania State University et al. (" AFS v. Penn State "), 553 F. Supp. 1268 (M.D.Pa. 1982). Since the suit in Pennsylvania raises many of the issues present herein, it is instructive to summarize the course of that litigation before turning to the instant motion.
In its initial action in Pennsylvania, AFS asserted the right to conduct group product demonstrations and sales in common areas of the residence hall. After a trial with an advisory jury, Judge Muir issued fact findings that, inter alia, vendors had alternative means of both communicating with and selling to students; that AFS had engaged in questionable sales practices; that Penn State was enforcing a general rule against commercial solicitation and was not singling out AFS for enforcement of the rule on account of any particular practice by AFS. AFS v. Penn State, 464 F. Supp. 1252, 1254-8 (M.D.Pa. 1979).
The Court then held that AFS had a right under the First Amendment to disseminate information as to the product that it sells, but that it did not have a right "to sell its merchandise to college students in the manner which it has selected as being most conducive to sales." Id. at 1262. After concluding that the ban on group product demonstrations and sales was "justified by Penn State's interest in preventing the dangers inherent in in-person solicitation or sales, or alternatively, by Penn State's interest in protecting the privacy of its students within the residence halls", Id. at 1265, the Court ordered judgment for the defendant.
On appeal, the Third Circuit affirmed Judge Muir's decision. AFS v. Penn State, 618 F.2d 252 (3d.Cir. 1980). However, in so doing, the Court emphasized that Penn State had offered to permit AFS to conduct its demonstrations provided it did not transact business at the conclusion of such demonstrations:
Here Penn State has not totally supressed the speech of the plaintiff. It has restricted that speech somewhat, however. Although AFS sales representatives are allowed into the residence halls to present demonstrations to groups of students, they cannot consummate sales at these gatherings. Even that restriction is removed if the sales representative is invited to the hall by an individual student who decides to purchase the merchandise marketed by AFS.
The Court further held that Penn State had a legitimate basis for distinguishing between commercial and non-commercial speech, and that its prohibition of commercial transactions was a valid measure "to preserve better the traditional college environment and atmosphere conducive to effective education and learning". Id. at 259.
AFS interpreted the Third Circuit decision as an acknowledgment of its right to present unregulated product demonstrations in the common areas of Penn State's residence halls, and it returned to District Court to obtain a preliminary injunction barring interference with such demonstrations. At the same time it also sought an injunction permitting it to conduct group demonstrations and sales in students' dormitory rooms. Moreover, six students joined as co-plaintiffs, asserting their own speech, association, and privacy rights to host or attend demonstrations in both the common areas and dormitory rooms. Judge Muir denied the preliminary injunctions on the grounds that (1) AFS's claims were barred by res judicata; (2) the students' claims lacked the requisite showing of irreparable harm and probability of success on the merits. AFS v. Penn State, 510 F. Supp. 983 (M.D.Pa. 1981). The Court noted that the student plaintiffs were free to attend the demonstrations in the residence hall common areas and subsequently purchase the goods individually in their rooms. In addition to finding no infringement of any free speech rights, the Court specifically found no likelihood of the students prevailing on privacy or associational rights grounds, since it was unable to discern how either of those rights were curtailed.
Upon subsequent motion by the defendant, the District Court granted summary judgment against AFS, essentially repeating the same analysis as in its previous denial of a preliminary injunction. AFS v. Penn State, 522 F. Supp. 544 (1981). One arguably new issue raised at this stage of the litigation involved plaintiffs' claim that Penn State engaged in "censorship" when it screened AFS' presentation to ensure that they were only informational and did not involve commercial solicitation. The Court found that the material which AFS sought to include in its presentation was impermissible under prior decisions in the case, and therefore rejected the charge of censorship. Again, the Court held that Penn State's regulations were not a significant infringement of the students' speech, privacy, or associational rights.
Plaintiffs again appealed to the Third Circuit, which addressed separately the claim of censorship and the student's claim of a right to host or attend group demonstrations in their dormitory rooms. AFS v. Penn State, 688 F.2d 907 (1982). The Court discerned in the censorship claim a new issue, not barred by res judicata: whether Penn State could prohibit portions of AFS' demonstration on the basis of content, in addition to barring consummation of the transaction. The Court found that Penn State had been preventing AFS from disclosing price, credit, and guarantee terms, information which the Court regarded as protected commercial speech under Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 48 L. Ed. 2d 346, 96 S. Ct. 1817 (1976). Failing to find a substantial governmental interest in this content-based restriction, the Court reversed the summary judgment previously entered against AFS.
Turning to the student's claims, the Court first agreed with the district court that Penn State could limit AFS activities in the common areas of the residence halls to the dissemination of information, and could bar the transactions that typically followed product demonstrations. But it found that the district court failed to adequately consider "the students' associational and free speech rights in their activities in their dormitory rooms independently from the activities conducted in the common areas," Id. at 915. The Court acknowledged that "Penn State may indeed have a satisfactory reason for distinguishing between group activity in individual dormitory rooms and in common areas", id. at 915, but the record below did not reveal it. Consequently, summary judgment as to the students was also reversed, and the case remanded to the district court.
Once again before Judge Muir, plaintiffs re-moved for a preliminary injunction to enable the students to hold demonstrations of AFS merchandise in their dormitory rooms. The Court held first that AFS' rights were derivative, and not sufficient to warrant a preliminary injunction on their behalf; nor could AFS demonstrate irreparable harm if the injunction were denied. AFS v. Penn State, supra, 553 F. Supp. 1268 (1982).
However, Judge Muir regarded the students' claim as more substantial, particularly their assertion of speech rights. Irreparable harm was discerned in (1) the intangible nature of the constitutional right in question and its incapability of redress by damages, and (2) the temporary duration of the plaintiff-students' residence in the dormitories.
Turning to the question of "probable success on the merits", the Court found the students' chances of success quite strong. It reasoned that Penn State's restriction on commercial activities are invalid unless they "leave open alternative channels for communication", id. at 31, and found a lack of such alternative channels. It then analyzed the purported "significant governmental interests" suggested by Penn State (i.e., to protect students' privacy, avoid disruption, protect students from misleading or coercive sales practices, etc.) and found those interests "unconvincing", id. at 33, in view of other activities permitted in the dormitories. The Court also observed that more narrowly tailored regulations could serve the university's interest in preventing disruption and other anticipated problems.
The Court therefore concluded that an injunction was warranted, but it tailored that injunction quite narrowly: relief was granted only as to the one named plaintiff who was still a student at the time of the decision.
With the benefit of several thorough and highly pertinent decisions from Judge Muir and the Third Circuit in hand, we turn to the motion now before this Court.
To obtain a preliminary injunction in this Circuit, the movant must show "(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting preliminary relief." Jackson Dairy, Inc. v. H.P. Hood & Sons, 596 F.2d 70, 72 (2d Cir. 1979). Phillips v. Marsh, 687 F.2d 620 (2d Cir. 1982). Movants' burden is generally considered enhanced when the injunction sought would change the status quo. See, Holy Spirit Assn., Etc. v. Town of New Castle, 480 F. Supp. 1212, 1214 (SDNY 1979) ("The purpose of the preliminary injunction is to preserve the status quo between the parties pending a full hearing on the merits"); Patterson v. United Fed. of Teachers, 480 F. Supp. 550, 553 (SDNY 1979).
The requirement of "irreparable harm" is satisfied in this case by the very nature of the claim. In Elrod v. Burns, 427 U.S. 347, 373, 49 L. Ed. 2d 547, 96 S. Ct. 2673 (1976), the Supreme Court held that "the loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Since plaintiffs have alleged deprivation of their First Amendment rights, irreparable harm must be presumed. See, Intern. Soc. for Krishna, Etc. v. City of N.Y., 484 F. Supp. 966, 970-71 (SDNY 1979); NYPIRG v. Village of Roslyn Estates, 498 F. Supp. 922, 930 (EDNY 1979); St. Martin's Press, Inc. v. Carey, 440 F. Supp. 1196, 1204 (SDNY 1977); see also, Katz v. McAulay, 438 F.2d 1058, 1060 n.3 (2d Cir. 1971).
The next prong of the preliminary injunction standard, "likelihood of success on the merits", involves the Court in evaluating the merits of plaintiffs' claims. Clearly the claim of deprivation of first amendment speech rights is the most substantial ground for ...