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1 H. SINCLAIR KERR, JR. (61713) …
Tags: bay guardian, city and county of san francisco, east bay express, express publishing, ivo, james m wagstaffe, kerr wagstaffe, labar, larkin, memorandum of points, miami herald, october 19, plaintiff, san francisco ca, sf weekly, sinclair, spear street, state of california, superior court of the state of california, tornillo,Pages: 15
Language: english
Created: Fri Jun 29 17:03:18 2007
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1 H. SINCLAIR KERR, JR. (61713)
JAMES M. WAGSTAFFE (95535)
2 IVO LABAR (203492)
KERR & WAGSTAFFE LLP
3 100 Spear Street, Suite 1800
San Francisco, CA 94105ญ1528
4 Telephone: (415) 371-8500
Fax: (415) 371-0500
5
Attorneys for Defendants
6 NEW TIMES MEDIA LLC, SF WEEKLY LP,
EAST BAY EXPRESS PUBLISHING LP, TROY
7 LARKIN
8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
9
CITY AND COUNTY OF SAN FRANCISCO
10
UNLIMITED JURISDICTION
11
BAY GUARDIAN COMPANY, INC., Case No. 04-435584
12
Plaintiff, MEMORANDUM OF POINTS AND
13 AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY
14 v. JUDGMENT UNDER MIAMI HERALD
v. TORNILLO
15 NEW TIMES MEDIA LLC, SF WEEKLY LP,
EAST BAY EXPRESS PUBLISHING LP,
16 TROY LARKIN, DOES ONE through 10, Case Filed: October 19, 2004
inclusive,
17 Date: September 14, 2007
18 Defendants. Time: 11:00 a.m.
19 Courtroom: 304
20 Trial: October 15, 2007
21 HON. RICHARD A. KRAMER
22
23
24
25 FILED CONDITIONALLY UNDER SEAL PURSUANT TO C.R.C. 2.551(d)
26
27
28
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1 I. INTRODUCTION
2 The Bay Guardian Company, Inc. ("Bay Guardian, Inc.") seeks an injunction that would
3 violate constitutional free speech rights by interfering with the editorial content of Defendants'
4 newspapers. The injunction that the Bay Guardian seeks would force the Defendants' to cut
5 editorial expenses, and thus content, in order to comply with an antiquated Depression-era statute
6 (Unfair Practices Act; Bus.& Prof. Code ง 17000 et seq.) that was designed to apply to
7 commodities like bread and milk, and not fundamental rights like free speech.
8 There is no evidence that any advertising could have been sold by the SF Weekly or the
9 East Bay Express at rates greater than it was sold for in the post-dot.com bust, post-9/11, Bay
10 Area advertising market. Insofar as Business & Professions Code section 17026 defines "cost,"
11 as "the cost of raw materials, labor, and all overhead expenses of the producer," this Court's
12 observation early in the proceedings that "selling below cost" and "losing money" have identical
13 statutory meanings is spot on.
14 In the absence of a single piece of evidence showing or even suggesting that the
15 defendant newspapers could have sold advertising at a higher rate than they did--that they could
16 have magically increased the revenues side of their ledgers in a market meltdown, had they only
17 wanted to--what is left is the "cost" side of the section 17043 equation. For, as any business
18 person knows, if revenues cannot be increased, then the only other option in moving toward
19 profitability is cost-cutting. As will be shown below, if a state statute would, as applied to a
20 newspaper, compel the cutting of editorial content and distribution expenditures, it violates the
21 free press protections of both the United States and California constitutions.
22 While laws that regulate the economic activities and conduct of businesses, including
23 newspapers, can survive facial constitutional challenges if genuinely speech-neutral, a statute
24 runs afoul of the constitution when, either facially or as applied, it results in governmental
25 infringement on editorial content and freedoms, including the editorial decision-making of
26 editors and publishers. In this case, a newspaper subject to a mandated price floor at its fully
27 allocated costs has only one option in practice: gut editorial content and staff. That is what the
28 Bay Guardian has done; that is what it seeks to impose on the defendant newspapers. Under the
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1 governing authorities, the result of such an injunction would violate constitutional free speech
2 protections as would the imposition of punitive sanctions against the defendant newspapers'
3 decision to spend more on editorial and distribution than they received in advertising revenues.
4 II. BACKGROUND
5 A. DEFENDANTS' DECISIONS AND EXPENDITURES TO MAINTAIN EDITORIAL
QUALITY AND STAFF
6
7 Defendant New Times Media, LLC ("New Times"), the parent company at the times in
8 question for co-defendants SF Weekly LP ("SF Weekly") and East Bay Express, began as a
9 newsweekly in Phoenix in 1970 in response to the pro-war stance of the commonly owned daily
10 newspapers, The Arizona Republic and Phoenix Gazette. (Declaration of Michael Lacey ("Lacey
11 Decl.") ถ 3.) Before the SF Weekly and East Bay Express were acquired a conscious decision
12 was made to incur 5 or 6 years of operating losses in a highly competitive Bay Area advertising
13 market, by investing heavily in editorial content and broader circulation. (Id. ถ 7; Declaration of
14 J. Larkin ถ 8-9) A movement away from the pre-acquisition use of freelance writers to more
15 costly full-time professional journalists was the most salient organizational and economic intent
16 and result. (Id. ถ 5.)
17 New Times' commitment to editorial investment and to pursuing exacting journalistic
18 standards has resulted in award-winning newspapers. (Id. ถ 9.) For example, this strategy
19 produced fruit last month as LA Weekly writer Jonathan Gold won a Pulitzer Prize for criticism.
20 (Id. ถ 10.) With a commitment to editorial excellence--to the simple idea that quality journalism
21 costs money--in mind, SF Weekly and the East Bay Express were acquired in 1995 and 2001
22 respectively. (Id. ถถ 2, 7.)
23 In addition to markets in which the defendants have competed with multiple daily papers
24 (and a large and growing list of competing advertising platforms), they compete in cities like San
25 Francisco with a single paid-circulation daily. Only in San Francisco does the dominant daily--
26 traditionally thought within the industry to share market power attributes with a toll road--lose
27 money. (Declaration of Joseph Kalt., Exh. A at pp. 22-23 (hereafter "Kalt Report").) The $330
28 million in losses the Chronicle has reported since it was acquired by Hearst Corp. in 2000 are
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1 unprecedented. (Id.) It is economically axiomatic that the Chronicle has sold more print
2 advertising at less than its fully allocated cost in the past seven years than the total revenues of
3 the plaintiff and defendant newspapers combined. The cost and revenue trend lines point to San
4 Francisco becoming the first major city in America without a paid circulation daily.
5 B. DEFENDANTS' ADVERTISING COSTS UNDER PREVAILING MARKET CONDITIONS
6 AND THEIR COMMITMENT TO PRESERVING EDITORIAL CONTENT AND STAFF
7 As demonstrated more specifically in defendants' companion motion for summary
8 adjudication, the Bay Area marketplace for advertising space has experienced extremely adverse
9 market conditions that have devastated sellers of advertising space. (Kalt Report at pp. 13-18.)
10 These changing conditions have reduced the demand for advertising space in print media and
11 increased the overall supply of advertising space as new options (e.g., Craigslist) have emerged
12 and continued to grow in importance. (Id.)
13 The natural marketplace response to conditions of declining demand and rising supply is
14 to reduce fair market prices, the effect of which has been that firms can, and do, readily suffer
15 losses. (Id. at pp. 22-35.) In the case of defendants, the inability to obtain a price so as to cover
16 its fully allocated costs due to market conditions necessarily would require the company to cut
17 costs elsewhere if the advertising prices were required to be at a sufficiently low level as a result
18 of application of a prohibition on selling at less than fully allocated, total costs. (Id. at pp. 9, 30,
19 Lacey Decl. ถ 11.) For the defendants, that would mean making substantial cuts in editorial
20 spending, resulting in a substantial reduction in editorial content, staffing and the overall size of
21 the newspapers. (Id.)
22 III. ARGUMENT
23 A. THE APPLICATION OF AN OTHERWISE VALID STATE STATUTE IS
UNCONSTITUTIONAL IF IT NECESSARILY INTERFERES WITH A NEWSPAPER'S
24 EDITORIAL FUNCTION AND DECISION-MAKING
25 It is well-settled that if application of a state statute might interfere with or restrain a
26 newspaper's editorial function, both a facially defective statute and a valid statute, as applied,
27 are unconstitutional.
28
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1 In Miami Herald v. Tornillo, 418 U.S. 241 (1974), the United States Supreme Court was
2 asked to decide whether a Florida "right to reply" statute, granting a political candidate the right
3 to equal space in order to reply to criticism or attacks by a newspaper, invaded the province of
4 editors and publishers by requiring that they "...publish what [they] would prefer to withhold."
5 Id. at 255, citing Branzburg v. Hayes, 408 U.S. 665, 681 (1969). In a unanimous decision
6 striking down the Florida statute, the Court found the law suffered from two essential
7 constitutional infirmities. First, "since the amount of space [in a] newspaper...is finite, if a
8 newspaper is forced to publish a particular item, it must as a practical matter omit something
9 else." Id. at 256. Second, "[e]ven if a newspaper would face no additional costs to comply with
10 a compulsory access law and would not be forced to forgo publication of news or opinion by the
11 inclusion of a reply, the Florida statute fails to clear the barriers of the First Amendment because
12 of the intrusion into the function of editors. A newspaper is more than a passive receptacle or
13 conduit for news, comment and advertising. The choice of material to go into a newspaper, and
14 the decisions as to the size and content of the paper...constitute the exercise of editorial control
15 and judgment." Id. at 258 (emphasis added).
16 There is no question that newspapers, like other businesses, can claim no talismanic
17 immunity from the general operation of antitrust laws and other commercial regulation. In
18 Associated Press v. United States, 326 U.S. 1, 20 (1945), a group of newspapers jointly
19 established bylaws prohibiting members from selling news content to nonmembers, and giving
20 an existing member a veto over the admission of a new member with whom it competes
21 geographically. In such a situation, the Court held, the protections of the First Amendment were
22 not advanced by the bylaws in question, but were subverted by them. Simply put, there is no
23 conflict with the First Amendment under such circumstances, but rather there is a conflict
24 between the anticompetitive goals of a group of businesses and the free press and speech
25 protections of the constitution.
26 Where, however, a conflict between the First Amendment is real--as where an industry
27 group or labor union with anticompetitive designs is otherwise unlawful under the Sherman Act
28 petitions the government for a change in the law or for a favorable agency interpretation of
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1 law--the bar to antitrust enforcement under the First Amendment is absolute, even where the
2 defendants were found to have violated the substantive provisions of the antitrust laws. Eastern
3 Railroad Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 (1960); United Mine
4 Workers of America v. Pennington, 381 U.S. 657 (1965).
5 Such protections are even more pronounced under Article I, Section II, of the California
6 Constitution. Under this provision, free speech and press protections are "unlike the First
7 Amendment's, unlimited in scope." R.H. Macy & Co. v. Contra Costa County, 226 Cal. App. 3d
8 352,361 (1990), citing U.S. v. Salerno, 481 U.S. 739, 745 (1987). California courts have
9 consistently embraced Justice Mosk's observation that "...the ordinary deference a Court owes
10 to any legislative action vanishes when constitutional rights are threatened." Spiritual Psychic
11 Church v. City of Azuza, 39 Cal. 3d 501, 514 (1985). Or, as Justice Tobriner said, where free
12 speech rights conflict with the application of a statute, courts "...are not free to disregard the
13 practical realities" of the precise factual context in which the First Amendment challenge arises.
14 White v. Davis, 13 Cal. 3d 757, 767 (1975). Importantly, Courts in California can draw no
15 substantive distinction between free speech encroachment at the hands of a facially invalid
16 statute or at the hands of a plaintiff asking the court to apply an otherwise valid statute in an
17 unconstitutional manner, or to produce an unconstitutional result. See Tobe v. City of Santa
18 Ana, 9 Cal. 4th 1069 (1995). A statute simply "cannot be construed for purposes of
19 constitutional analysis without concern for its...ultimate effect" in a particular factual context.
20 San Francisco Unified School District v. Johnson, 3 Cal. 3d 937, 953 (1971).
21 The normal analytical distinction between "facial" and "as applied" challenges is
22 meaningless in a Miami Herald attack, as is any "balancing" of public versus private interests.
23 As Justice White wrote in concurrence in Miami Herald, the State of Florida had advanced "...a
24 concededly important interest in ensuring free and fair elections by means of an electorate
25 informed about the issues." Miami Herald, 418 U.S. at 260. But, he wrote, "A newspaper... is
26 not a public utility subject to `reasonable' governmental regulation in matters affecting the
27 exercise of journalistic judgment as to what shall be printed." Id. at 259.
28
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1 Courts have regularly upheld an "as applied" constitutional challenge by a newspaper
2 defendant to an otherwise valid statute when such application will interfere with freedom of the
3 press. In Nelson v. McClatchy Newspapers, Inc., 936 P. 2d 1123 (S. Ct. Wash. 1997), for
4 example, a reporter sued her newspaper employer under a state statute barring discrimination
5 against an employee for political activities undertaken outside the workplace when it applied its
6 internal code of ethics that prohibited high-profile political activity by reporters.1 The two issues
7 before the court were whether the Washington law "...prohibits an employer from discriminating
8 against an employee because the employee refuses to remain politically abstinent, [and if so,
9 whether] its application violates a newspaper's constitutionally guaranteed free press right to
10 editorial control of the paper's content." Nelson, 936 P.2d at 1124. The court answered both
11 questions in the affirmative.
12 The plaintiff reporter, a self-professed lesbian, spent much of her off-duty time serving as
13 a political activist, attending pro-gay demonstrations, testifying before public bodies on issues of
14 concern to her, collecting signatures for ballot initiatives--in short, exercising her First
15 Amendment rights. As a result of her activities, her employer transferred her from reporting
16 duties to swing shift copy editor. She sued, seeking, among other things, reinstatement to her
17 reporting duties that her employer conceded she had performed in an exemplary fashion.
18 The court found a clear and unambiguous violation by the defendant newspaper of the
19 state statute. The court then looked to whether the statute, as applied, conflicted with the
20 newspaper's free press rights under Miami Herald.2 The arguments of the parties were straight-
21 forward. The newspaper argued that "...requiring reporters to abide by its no-conflict-of-interest
22 policy [was] necessary to uphold editorial integrity, which [it] assert[ed] is constitutionally
23 protected." Nelson, 936 P.2d at 1129. The reporter countered that "...what [the newspaper's]
24
25
1
26 See RCW Section 42.17.680 (2).
2
27 Article I, Section 5 of the Washington Constitution is substantially identical to California's
Article I, Section II. It provides: "Every person may freely speak, write and publish on all
28 subjects, being responsible for the abuse of that right."
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1 reporters do on their own time has nothing to do with the content or credibility of the newspaper
2 and accordingly the free press clauses of the state and federal constitutions is irrelevant." Id.
3 The court first took note that "...of all the media, the written press has been protected
4 most vehemently. Id. at 1130. It then found that Miami Herald's absolute bar on governmental
5 interference with the functions of editors and publishers--with what goes into the newspaper and
6 what does not--applied to the reinstatement of the reporter. In reinstating summary judgment
7 against the reporter, the court held that it simply had no authority to order reinstatement. "[I]f a
8 newspaper cannot be required to publish a reporters' work" the court asked, "how can it be
9 constitutionally required to employ the individual as a reporter?" Id. at 1131.
10 Similarly, in Passaic Daily News v. NLRB, 736 F.2d 1543 (D.C. Cir. 1984), the National
11 Labor Relations Board alleged that the cancellation of a reporter/union organizer's newspaper
12 column violated the National Labor Relations Act. As in Nelson, there was no question about a
13 violation of the underlying statute--the Board's finding being richly supported that "...the
14 company discontinued [plaintiff's] weekly column because of his involvement in protected
15 [union] activities." Id. at 1549. The court nonetheless refused to uphold the Board's order
16 mandating reinstatement. "Until its decision in [Miami Herald] the [Supreme] Court's view on
17 whether a newspaper could be compelled to publish that which it chose to withhold could be
18 discovered only by implication. In [Miami Herald], however, the Court was explicit." Id. at
19 1557. The arguments of the NLRB were compelling that punishment of protected union activity
20 had occurred in this case and that disallowing reinstatement essentially held the newspaper above
21 the National Labor Relations Act. Yet the court was not persuaded. "However much vitality
22 may be found in these arguments, at each point the implementation of a remedy such as an
23 enforceable right to access necessarily calls for some mechanism, either governmental or
24 consensual. If it is governmental coercion, this at once brings about a confrontation [with] the
25 express provisions of the First Amendment." Id.
26 If this Court turns over the Miami Herald coin, what it will find on the other side is this
27 case. There is no free press distinction--none--between the application of a statute in a manner
28 that requires an editor or publisher to "publish that which he would prefer to withhold" and the
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1 application of a sales below cost statute in a manner that would require that they "withhold that
2 which they would prefer to publish" simply because ad revenues are insufficient to offset
3 editorial and distribution costs at the levels editors and publishers choose.
4 B. AS APPLIED TO THE DEFENDANT NEWSPAPERS, SECTION 17043 WOULD
UNCONSTITUTIONALLY INTERFERE WITH FREE SPEECH RIGHTS
5
6 Plaintiff, in its complaint, seeks to enjoin and punish decisions made by the defendant
7 newspapers in selling advertising below their fully allocated costs. Business & Professions Code
8 section 17026 defining "cost" makes "selling below cost" synonymous, as this Court has noted,
9 with "losing money" since substantially all costs incurred by the defendants--from reporter
10 salaries and health insurance, to printing and distribution costs--are part of the "rate base" in
11 determining what constitutes "cost" in a below-cost transaction.
12 The "First Amendment economics" facing newspaper editors and publishers to which the
13 Court in Miami Herald made such unmistakable reference are much more stark and glaring in
14 this case than they were in Miami Herald. This case is not about governmental authority to order
15 the insertion of a single reply by a single political candidate to a single news story. The rule the
16 plaintiff asks this Court to articulate--that the defendant newspapers may spend on editorial and
17 distribution only as much as advertising revenues will permit within the strictures of the sales
18 below cost statute--has no history in the First Amendment and should have no future.
19 It is telling that when Judge Easterbrook searched his mind for an example of markets
20 that absolutely require an investment in years of below-cost pricing in order for a new market
21 entrant to achieve profitability, he chose, from a limitless commercial universe, print advertising.
22 "New magazines," he wrote, "lose money for years as they try to increase circulation and attract
23 advertising revenue, without creating the tiniest risk of monopoly." A.A. Poultry Farms, Inc. v.
24 Rose Acre Farms, 881 F.2d 1396, 1400 (7th Cir. 1991). In the Bay Area, there was a period of
25 years in which the investment in editorial content and distribution was not offset by advertising
26 revenues as the company sought to build a readership and advertising base. From 1995-1999 the
27 SF Weekly operated at a deficit. In 2000-2001 it turned a small profit. (Lacey Decl. ถ 8.) And,
28 following the dot.com bust and the events of 9/11, profitability has not been restored. (Id.) The
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1 East Bay Express was never profitable and, most tellingly, the new ownership group led by the
2 paper's editor has shed salaried reporters from the defendants' ownership era whose annualized
3 compensation exceeds $163,000. (Id. ถ 6.) Discovery also shows that the Bay Guardian itself
4 made massive cuts to its editorial expenditures year after year, as the Bay Area advertising
5 market spiraled into a sustained decline. Whether the new ownership of the East Bay Express or
6 the Bay Guardian have achieved revenues that exceed their costs is not clear, but what is clear is
7 that slashing editorial costs brings both papers closer to the cost/revenues equilibrium the
8 plaintiff seeks to impose on the defendants using section 17043 as the animating statutory
9 weapon.
10 It is axiomatic that a newspaper's content and advertising are inextricably intertwined.
11 "The more attractive the newspaper is to its targeted audience, the more readers it attracts. The
12 more readers it attracts, the better is the newspaper's ability to attract advertisers."3 This
13 precisely describes the defendant newspapers' market and competitive strategy. It is
14 unquestionable that an expanded use of freelance writers, for example, rather than professional
15 reporters with health insurance and a retirement plan would have greatly reduced the fully
16 allocated cost of producing the defendants' newspapers, at least in the short term. The same
17 could be said for cutting distribution by several thousand copies.
18 But just as the First Amendment prohibits courts from ordering a newspaper to produce a
19 more editorial costly and robust, or widely distributed, newspaper than it chooses to produce, it
20 also prohibits enjoining or punishing the defendant newspapers' decision to invest in editorial
21 content and distribution. It has been over 30 years since anyone suggested that a statute, even a
22 statute with sound public policy objectives, could be applied in a way that restricted the
23 expenditure of money on speech. Buckley v. Valeo, 424 U.S. 1 (1976). The Supreme Court's
24 ruling that any governmental limitation on federal candidate expenditures necessarily restrained
25 free speech rights was both telling and an apt admonition in this case:
26
27 3
Stucke & Grunes, ANTITRUST AND THE MARKETPLACE OF IDEAS, 69 Antitrust L.J. 249, 271
28 (2001).
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1 Being free to engage in unlimited political expression subject to a ceiling on expenditures
2 is like being free to drive an automobile as far and as often as one desires on a single tank of
3 gasoline. Id. at p. 19, n. 18.
4 By framing its complaint in terms of the competition for Bay Area advertisers rather than
5 Bay Area readers, the plaintiff asks this Court to debase and devalue the quite obvious
6 conclusion that both are implicated here. And by focusing its complaint entirely on the question
7 of the cost and price of the defendants' advertising, and not on the economic inputs, principally
8 editorial content and distribution, that drive the cost side, the plaintiff seeks to devalue editorial
9 decision-making that chooses to incur those costs, irrespective of whether ad revenues fully
10 cover the gap.
11 The Supreme Court in Miami Herald did not find the state statute offensive because it
12 would impact the decisions of editors or publishers about what to put into or leave out of their
13 paper. They found it offensive because it might impact those decisions. The court in Passaic
14 Daily News did not find that the NLRA's goal of advancing employee welfare by collective
15 bargaining was not a good and laudable goal, it found precisely the opposite. But it also found
16 that any order it might fashion might impact the editorial judgment, the content determinations,
17 of editors and publishers, and that, Miami Herald says, is turf upon which a court may not
18 constitutionally tread. Even a substantive finding that the defendant newspaper in Nelson
19 abridged its employee's First Amendment rights when it pulled her out of the newspaper was
20 insufficient to induce the court into the business of deciding what goes into, or is left out of, a
21 newspaper.
22 This case does not require the court to decide whether there are circumstances in which
23 section 17043 might be properly applied against a newspaper. There are undoubtedly instances
24 in which the ad pricing decisions of an established and profitable paper--a species not readily
25 identifiable in the Bay Area today--would bring a newspaper within the sanctions of section
26 17043. But this is not that case. This case is at least as much about editorial decision-making as
27 it is about advertising prices. As such, section 17043, as the plaintiff asks the Court to apply it,
28 would unconstitutionally infringe defendants' free speech rights, by articulating a rule that the
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1 largesse of the advertising marketplace, not the decisions of editors and publishers, control the
2 size, editorial quality and distribution of the defendant newspapers.
3 In his Miami Herald concurrence, Justice White spoke words familiar to all First
4 Amendment scholars. He said that where decisions about a newspaper's size and content are
5 concerned, "it has yet to be demonstrated how government regulation of this crucial process can
6 be exercised consistent with the First Amendment guarantees of a free press as have evolved to
7 this time." Miami Herald, supra at 258. Allowing a newspaper that has massively cut its own
8 editorial spending in response to a market meltdown to use a predation statute to force massive
9 cuts on two less-established market competitors would crudely invade editor and publisher
10 decision-making through the back door to achieve precisely what Miami Herald said cannot be
11 constitutionally imposed through the front door. Losing money on newspaper's editorial content
12 may, as a subjective business proposition, be a good idea or a bad one. But it is a constitutional
13 right.
14 IV. CONCLUSION
15 For the foregoing reasons, defendants respectfully request that the Court summarily
16 adjudicate the section 17043 claim in their favor because, as applied, the statute is
17 unconstitutional.
18 DATED: June 29, 2007 KERR & WAGSTAFFE LLP
19 By _________________________________________
JAMES M. WAGSTAFFE
20
21 Attorneys for Defendants
NEW TIMES MEDIA LLC, SF WEEKLY LP,
22 EAST BAY EXPRESS PUBLISHING LP, TROY
LARKIN
23 29625
24
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1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ............................................................................................................ 1
4 II. BACKGROUND .............................................................................................................. 2
5 A. Defendants' Decisions and Expenditures to Maintain Editorial Quality and
Staff....................................................................................................................... 2
6
7 B. Defendants' Advertising Costs under Prevailing Market Conditions................... 3
8 III. ARGUMENT.................................................................................................................... 3
9 A. The Application of an Otherwise Valid State Statute is Unconstitutional if
it Necessarily Interferes with a Newspaper's Editorial Function and
10 Decision-Making................................................................................................... 3
11 B. As Applied to the Defendant Newspapers, Section 17043 Would
Unconstitutionally Interfere with Free Speech Rights.......................................... 8
12
13 IV. CONCLUSION............................................................................................................... 11
14
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1 TABLE OF AUTHORITIES
2 Page
3 Cases
4 A.A. Poultry Farms, Inc. v. Rose Acre Farms,
881 F.2d 1396, (7th Cir. 1991) ........................................................................................ 8
5
Associated Press v. United States,
6 326 U.S. 1 (1945).............................................................................................................. 4
7 Branzburg v. Hayes,
408 U.S. 665 (1969).......................................................................................................... 4
8
Buckley v. Valeo,
9 424 U.S. 1 (1976)........................................................................................................ 9, 10
10 Eastern Railroad Presidents Conference v. Noerr Motor Freight,
365 U.S. 127 (1960).......................................................................................................... 5
11
Miami Herald v. Tornillo,
12 418 U.S. 241 (1974)................................................................................................ 4, 5, 11
13 Nelson v. McClatchy Newspapers, Inc.,
936 P. 2d 1123 (S. Ct. Wash. 1997).............................................................................. 6, 7
14
Passaic Daily News v. NLRB,
15 736 F.2d 1543 (D.C. Cir. 1984) ........................................................................................ 7
16 R.H. Macy & Co. v. Contra Costa County,
226 Cal. App. 3d 352 (1990) ............................................................................................ 5
17
San Francisco Unified School District v. Johnson,
18 3 Cal. 3d 937 (1971) ......................................................................................................... 5
19 Spiritual Psychic Church v. City of Azuza,
39 Cal. 3d 501 (1985) ....................................................................................................... 5
20
Tobe v. City of Santa Ana,
21 9 Cal. 4th 1069 (1995) ...................................................................................................... 5
22 U.S. v. Salerno,
481 U.S. 739 (1987).......................................................................................................... 5
23
United Mine Workers of America v. Pennington,
24 381 U.S. 657 (1965).......................................................................................................... 5
25 White v. Davis,
13 Cal. 3d 757 (1975) ....................................................................................................... 5
26
Statutes
27
Bus. & Prof. Code ง 17043........................................................................................................... 1
28
K E R R
ญญญญญ & ญญญญญ ญ ii ญ
W A G S T A F F E
LLP MPA IN SUPPORT OF MSJ UNDER MIAMI HERALD v. TORNILLO
1 Other Authorities
2 RCW Section 42.17.680 (2).......................................................................................................... 6
3 Stucke & Grunes, ANTITRUST AND THE MARKETPLACE OF IDEAS,
69 Antitrust L.J. 249, 271 (2001)...................................................................................... 9
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K E R R
ญญญญญ & ญญญญญ ญ iii ญ
W A G S T A F F E
LLP MPA IN SUPPORT OF MSJ UNDER MIAMI HERALD v. TORNILLO