LAGUNA PUBLISHING CO. v. GOLDEN RAIN FOUNDATION
(1982) 131 Cal.App.3d 816
COUNSEL
W. Mike McCray for Plaintiff and Appellant.
Pacht, Ross, Warne, Bernhard & Sears, Michael D. Koomer, Scott Z.
Zimmermann and Carol A. Schneiderman for Defendant and Respondent.
OPINION
MCDANIEL, J.
In this case we decide that it violated the plaintiff's free-speech,
free-press rights secured under article I, section 2 of the California
Constitution when unsolicited, live-carrier delivery of plaintiff's
giveaway newspaper was made the object of discriminatory exclusion from
Rossmoor Leisure World by defendant Golden Rain Foundation of Laguna
Hills. The extent to which plaintiff is entitled to damages, if any,
beyond injunctive relief lifting such exclusion, must be resolved at a
new trial of issues as later defined.
The action in the trial court was brought by Laguna Publishing Company
(plaintiff) against assorted defendants after plaintiff's give-away
newspaper, the Laguna News Post, was excluded by way of a denial of
entry into Rossmoor Leisure World for unsolicited, free delivery to the
residents of Leisure World, a private, residential, walled community
where only resident-approved access is permitted through guarded
security gates. The defendants named included Golden Rain Foundation of
Laguna Hills (Golden Rain), the entity which finally decided to exclude
plaintiff's newspaper from Leisure World, and which owns the streets,
sidewalks, and other common areas within its boundaries for the benefit
of its residents. Also named as a defendant was Golden West Publishing
Corp. (Golden West), publisher of the Leisure World News, a give-away
type newspaper which is and for years has been accorded the exclusive
privilege of entry into Leisure World for free, unsolicited delivery to
its residents. [131 Cal.App.3d 821]
The fourth amended complaint upon which the case went to trial,
undertook to plead several theories of entitlement to relief. Plaintiff
alleged that Golden Rain and Golden West had engaged in a conspiracy in
restraint of trade, violative of the Cartwright Act, and that Golden
West had also engaged in certain conduct against plaintiff violative of
the Unfair Trade Practices Act.
For its part, Golden West cross-complained against plaintiff and its
principal, Vernon R. Spitaleri, alleging the latter's violations of the
Cartwright Act, the Unfair Trade Practices Act, in addition to other
conduct allegedly amounting to unfair competition under the common law.
The respective claims noted were all tried to a jury which resolved the
issues raised by the complaint against the plaintiff and resolved those
raised by the cross-complaint in favor of Golden West. The latter was
awarded $5,000 compensatory and $50,000 exemplary damages.
Otherwise, and of central importance here, the plaintiff asserted that
the exclusion of its newspaper from Leisure World constituted a
deprivation of its free speech and free press rights secured to it under
either the federal or state Constitutions. Based on such assertion,
plaintiff prayed for an injunction to lift such exclusion and for money
damages either under the federal civil rights statute, 42 United States
Code section 1983, or on the basis of a claimed "self-executing"
modality under article I, section 2, of the California Constitution.
Procedurally, the manner in which the constitutional issues were
presented and resolved was somewhat complex. Nine months before trial,
the court granted a defense motion that certain issues of fact be deemed
without substantial controversy. They are:
"1. Leisure World of Laguna Hills is a private residential housing
project, consisting of dwelling units, streets, maintenance and, other
facilities.
"2. All of the real property within Leisure World is privately owned and is used only for private purposes.
"3. Leisure World is not open to the general public. [131 Cal.App.3d 822]
"4. Entry into Leisure World is restricted to authorized persons who must pass through gates guarded by private security guards.
"5. Since the inception of Leisure World in 1964, only the owners or
occupants of real property within Leisure World, or their invitees, have
been authorized to enter Leisure World. fn. 1
"6. There are no business districts or commercial facilities or areas
such as stores, shopping centers, office buildings, or the like within
Leisure World, nor have there ever been any such districts, areas, or
facilities therein.
"7. Beginning in late 1967, and continuing to date, plaintiff has been
denied permission to enter Leisure World for the purpose of delivering
its newspapers by carrier boy on an unrequested basis."
Item 8, argued as a part of such motion to the effect that exclusion of
the Laguna News-Post from Leisure World did not violate plaintiff's
constitutional rights, was excepted from the order granting the motion.
However, the court did grant a later defense motion for an order that
plaintiff refrain, in the presence of the jury, from making any
reference to its claim of free speech abridgement.
The net legal effect of the later order was the same as if the court had
sustained a general demurrer to plaintiff's theory of relief based upon
a claimed violation of its constitutional rights of free speech and
free press; hence, the jury trial of those issues arising under the
respective allegations characterized as violations of the Cartwright Act
and the Unfair Trade Practices Act proceeded without recognition of the
claimed deprivation of plaintiff's constitutional rights.
After the jury brought in its verdict, the court, sitting in equity,
took further evidence on plaintiff's application for an injunction and
then denied such application. In support of that denial, it made
extensive findings of fact and conclusions of law. In this connection,
it is appropriate to observe, in terms of extrinsic, observable events,
that there was little if any conflict in the evidence. The dispute
between the parties lay [131 Cal.App.3d 823] in their divergent
views of the legal consequences of those events which all agree
happened, and so the findings add nothing to aid our decisional task in
terms of the customary office fulfilled by findings of fact as part of a
record on appeal. In other words, the constitutional issue, as defined
hereinafter, is solely one of law with reference to which the jury
verdict and the court's findings have no significance whatsoever. That
legal issue derives from the order in limine which emasculated
plaintiff's deprivation of constitutional rights theory.
The plaintiff and the cross-defendants appealed from the judgment, and,
in the opinion filed in our initial effort to dispose of the appeal, we
held that plaintiff was entitled to an injunction by the terms of which
it would be accorded access to Leisure World on the same terms and
conditions as those enjoyed by the Leisure World News. We held further
that plaintiff was entitled to a limited new trial on those issues of
fact arising from its exclusion, solely in light of state statutes
proscribing conspiracies in restraint of trade, the same considered in
light of plaintiff's unconstitutional exclusion from Leisure World.
Otherwise, the judgment as it reflected the jury's verdict was affirmed.
Both defendants petitioned for rehearing. We granted those petitions; the matter was reargued and submitted for decision.
While the case was under submission, counsel for Golden West informed us that the appeal against it would soon be dismissed. fn. 2 That has occurred, and so only Golden Rain continues to oppose the appeal.
In the opinion filed following the first rehearing, we reached the same
result as the first time, i.e., reversing with directions: (1) to grant
plaintiff's application for equitable relief; and (2) to conduct a
further trial of the Cartwright Act issues in light of the
unconstitutionality of plaintiff's exclusion from Leisure World. Both
sides again petitioned for [131 Cal.App.3d 824] rehearing, and both petitions were again granted. Thus, the matter is once more before us for disposition.
The Constitutional Issue
I.
The complexity of the procedures in the trial court by which the
constitutional issue was presented and resolved has necessarily resulted
in prolix assignments of error relative to that issue. The plaintiff
contends that the trial court's ruling of December 5, 1977, which
precluded it from arguing or in any way adverting in the presence of the
jury to its claim of constitutional deprivation was improper because
Golden Rain's exclusion of plaintiff's newspaper from Leisure World was
tantamount to state action which operated to abridge plaintiff's rights
of free speech and free press. This contention proceeds upon two
theories under which the exclusion from Leisure World is characterized
by plaintiff as impermissible state action: (1) Leisure World is the
legal equivalent of a municipality under the "company town" cases; (2)
Leisure World's development and construction were accomplished only as a
consequence of federally guaranteed financing, with the result that its
actions partake of a public quality.
In our view, it more simply frames the issue to ask, on the undisputed
extrinsic facts presented by this record, if plaintiff's free speech and
free press rights, secured under either the state or federal
Constitutions, were abridged by the actions of Golden Rain in excluding
plaintiff's employees from Leisure World and thereby preventing the
unsolicited, live carrier distribution of plaintiff's newspaper, the
Laguna News-Post, to the residences in Leisure World.
II.
The trial court reserved its ruling on any right to an injunction until
after the jury phase of the trial had been completed. That the trial
court eventually denied plaintiff's application for an injunction, which
would have forced Golden Rain to cease its exclusion of the Laguna
News-Post from unsolicited, live carrier distribution within Leisure
World, necessarily indicates that nothing which the trial court received
in the way of evidence during the five-month, jury trial or during the
additional period thereafter, during which it took evidence, operated in
[131 Cal.App.3d 825] its view to demonstrate any deprivation of plaintiff's constitutional rights.
This observation is confirmed by certain of the trial court's
conclusions of law reached after promulgating 23 paragraphs of findings
extending to over a dozen pages of the record. Such conclusions are: (a)
"Plaintiff has no federal or state constitutional right to enter
Leisure World of Laguna Hills to distribute its newspaper by carrier to
occupants of dwelling units therein without any request or subscription
therefor by such occupants"; (b) "Plaintiff has no federal or state
constitutional right to enter Leisure World of Laguna Hills to
distribute its newspapers by carrier to the occupants of dwelling units
without any request or subscription therefor by such occupants when
Golden Rain Foundation of Laguna Hills, acting within the scope of its
authority, in behalf of its members, has denied Plaintiff permission to
enter to make such distribution."
In our view, those conclusions are wrong insofar as the state
Constitution is concerned. As a consequence, plaintiff is entitled to an
injunction which will terminate its exclusion from Leisure World and
thus enable it to distribute its newspaper there upon the same terms and
conditions as the Leisure World News is now distributed therein, fn. 3
subject nevertheless to such reasonable regulations as to time, place,
and manner as Golden Rain may elect to adopt to regulate disposition of
all newspapers within Leisure World.
III.
What then are the facts which are material to the question of whether
plaintiff's free speech and free press rights were abridged when it was
excluded by Golden Rain from distributing its unsolicited, give-away
newspaper to the residences of Leisure World?
Before answering that question, we are constrained to observe again,
despite the evidence presented to the court in the second, nonjury phase
of the trial, following which extensive findings were made, that on the
[131 Cal.App.3d 826] constitutional issue this is not an
evidence case. The material, extrinsic facts are not disputed. In
effect, the trial court ruled as a matter of law, without the need to
resolve any issues of fact, that no constitutional deprivation had
occurred as a consequence of the exclusion of plaintiff's newspaper by
Golden Rain from Leisure World. fn. 4
From this perspective, we shall recite the undisputed facts which
provide the basis for our reversal. Our factual recitation of what we
see to have been significant in reaching our decision, of course, starts
with the several items settled nine months before trial as being
without substantial controversy, with the exception of course of No. 5
which is wholly without any evidentiary support in the record.
Supplementing the six valid items noted, the record shows that the
entire residential community of Leisure World, consisting of both
condominiums and cooperative housing units, is comprised of roughly
contiguous groups of residents sometimes referred to as "mutuals." These
mutuals are also organized as nonprofit corporations and are
responsible for the actual maintenance and preservation of the
residential property within their respectively defined areas. As already
noted, Golden Rain owns all the common areas within Leisure World,
including the streets and sidewalks. As a consequence, Golden Rain is
responsible for the maintenance and upkeep of these non-residential
areas for the benefit of all the residents of Leisure World. All
residents of Leisure World are not members of Golden Rain. Its members
must apply for and be accepted for membership, such acceptance being
subject to assuming certain financial obligations.
To accomplish their respective maintenance and upkeep objectives, both
the mutuals and Golden Rain early on contracted with yet another legal
entity to perform the actual work functions. From 1964 to the end of
1972 the entity with such contracts was the Leisure World Foundation
(hereinafter LWF), and, since 1972, Professional Community Management,
Inc. [131 Cal.App.3d 827]
Although not a prescribed part of its duties under its contract with
Golden Rain, LWF, from the outset of its management of Leisure World,
published and delivered, unsolicited, to each residence therein a
community-type newspaper under the banner of the Leisure World News
which Golden Rain has steadfastly described as a "house organ." LWF
continued to do this until it sold the Leisure World News to defendant
Golden West, initially incorporated as Birchall, Smith & Weiner,
Inc., by the young men, who, as employees of LWF, had performed the
functions necessary to get out the paper, including the sale of
advertising.
During the beginning years of its publication by LWF, the Leisure World
News was a losing effort financially. Some of the costs of printing and
distributing the paper were defrayed by the sale of advertising, but in
the earlier years of its publication the larger share of such costs was
borne as a direct expense by LWF. As time passed, this direct expense
was increasingly offset by advertising revenues, but even as late as
1967 the deficit for an operation which brought in $138,390 was still
$6,055, reflecting expenses of $144,445.
In 1967, the two young men who had been hired by LWF to perform the task
of putting out the Leisure World News discussed with Edward Olsen,
president of LWF, the possibility, while continuing to work for LWF, of
their being accorded permission by their employer to publish for their
own account a so-called "shopper" for distribution to persons outside
Leisure World.
Permission to launch the new venture was granted; thereupon Carlton
Smith and Richard Birchall commenced publication of the News Advertiser
for circulation outside Leisure World. Smith and Birchall were allowed
to maintain an office for the News Advertiser in the same space provided
them by LWF to enable them to perform their duties in putting out the
Leisure World News. Advertising in the News Advertiser was sold to many
of the same businesses as those who bought space in the Leisure World
News. This advertising was sold at the same time by the same salesmen
who represented the Leisure World News.
The consequence of this was that the Leisure World News defrayed and/or
absorbed many of the expenses of Birchall, Smith & Weiner, Inc., the
firm eventually organized to publish the "outside" publication which
Smith and Birchall had been given permission by LWF to publish [131 Cal.App.3d 828]
while they continued to work for LWF in space provided for them.
Despite this increased overhead, the steadily increasing advertising
revenue of the Leisure World News brought in a net for it in 1971 of
$44,630 based on a gross of $318,616.
During this interval of time, i.e., from 1967 through 1971, the Leisure
World News was delivered unsolicited to all residences within Leisure
World by LWF with the full knowledge of and without any objection from
Golden Rain. In addition, such deliveries were carried out with a tacit
understanding with Golden Rain that no competing unsolicited, give-away
newspaper could be distributed within Leisure World except by mail. fn. 5
As a consequence of the exclusive access accorded the Leisure World News
by LWF, a meeting was arranged between publishers of three of the
area's competing newspapers, including plaintiff, on the one side, and
Edward Olsen of LWF on the other. The basic complaint voiced to Mr.
Olsen was that Leisure World's management was subsidizing the News
Advertiser, published by employees of LWF, while at the same time
refusing to allow its competitors inside Leisure World except by mail.
Olsen responded to such complaint by asserting that this policy of LWF
had been adopted and was being followed to allow LWF to recoup the
losses it had suffered during the earlier years in publishing the
Leisure World News. fn. 6 [131 Cal.App.3d 829]
Beginning in 1972 there was a series of letters and other communications
between Birchall, Smith & Weiner, Inc., on the one hand, and LWF on
the other, the latter being represented by Edward Olsen, the president,
and Otto Musch, an accountant. No good purpose would be served here to
summarize all of the steps and the numerous communications utilized to
develop a "record" in the corporate minutes of the two entities. It is
enough to state that the end result was that Birchall, Smith &
Weiner, Inc., purchased from LWF the Leisure World News for $48,000.
This price was agreed to be paid at $1,000 per month for only so long as
the buyer elected to continue with publication of the newspaper, or
until the 48 monthly payments had been made.
Referring again to the net of $44,630 earned by the Leisure World News
in calendar 1971, which accrued even though the Leisure World News was
absorbing certain of the expenses of the newspaper published by
Birchall, Smith & Weiner, Inc., the record reflects, out of the
mouth of the president of LWF, that LWF realized and was well aware that
if the Leisure World News could not be distributed inside Leisure World
on an unsolicited basis it would cease to be profitable. More
particularly, Edward Olsen testified concerning the agreement to sell
the Leisure World News to Birchall, Smith & Weiner, Inc., "that if
the Leisure World News could not be distributed inside Leisure World on a
permissive basis, that Leisure World News would have no value ...."
Otherwise, by the end of 1972 during which the gross of Birchall, Smith
& Weiner, Inc., had grown to $559,112, Olsen and Musch had organized
another corporation and had entered into contracts with the various
mutuals and with Golden Rain to take over all the management functions
performed up to that time by LWF for the residents of Leisure World.
This new corporation as earlier noted is known as the Professional
Community Management Corporation.
During this same time the pressure continued to mount from other
publishers, including the plaintiff, to gain access to Leisure World for
unsolicited carrier delivery. It is a reasonable inference to be drawn
from the extrinsic facts that in response to that pressure, under date
of March 30, 1973, a written agreement was entered into between Golden
Rain and Birchall, Smith & Weiner, Inc. (by then owned 51 percent by
the same persons who owned an interest in the management company
servicing Leisure World), fn. 7 which provided that Golden West would deliver [131 Cal.App.3d 830]
the Leisure World News to all of the residents of Leisure World. This
arrangement covered over 10,000 copies per week at an annual rate of
$3,600. As a consequence, the unsolicited carrier delivery of the
Leisure World News to all residences of Leisure World continued just as
before. However, a representation was then made to the competition,
including plaintiff, that the Leisure World News was being delivered in
compliance with the rules and regulations of Golden Rain which required
that newspapers could only be delivered by carrier within Leisure World
to subscribers. Nevertheless, the record fails to disclose that any
resident of Leisure World ever sought execution of the agreement or even
knew of its existence.
More particularly, as stated in plaintiff's opening brief, "[t]he
Defendants never asked permission of the residents to allow Birchall,
Smith & Weiner, Inc. to distribute and the record is completely void
of any evidence which showed that [even] one resident of Leisure World
of Laguna Hills ever requested that the Leisure World News be delivered
to them over the period of 1965 through the time of trial."
Otherwise, on the record, it is doubtful whether the board of directors
of Golden Rain had authority to enter into the agreement providing for
unsolicited delivery of the Leisure World News to all the residents of
Leisure World.
We have already related that the board of directors of Golden Rain on
March 30, 1973, entered into a written agreement with the predecessor of
Golden West by means of which Golden Rain undertook on behalf of all
the residents of Leisure World to "subscribe" to the Leisure World News
for each of those residents. fn. 8
In our original opinion, we characterized this agreement as a "cosmetic
subterfuge," and we remain persuaded that this is an accurate
characterization of the agreement. To be more explicit in disclosing our
reasons for this view of the matter, we note that the record includes
copies of both the articles of incorporation and bylaws of Golden Rain. [131 Cal.App.3d 831]
These items are significant not only in what they show but in what they
do not show. Nowhere in either instrument is there delegated to the
board of directors of Golden Rain any authority to decide what persons
or publications shall be afforded uninvited entry into Leisure World for
purpose of delivery to the individual residences of Leisure World.
Actually the subject is not dealt with at all.
In addition, the bylaws of Golden Rain, exhibit "J," provide, in article
II, for two classes of membership in the corporation as well as for
qualification and admission to membership. Membership is not automatic. A
resident must apply for membership in a mutual and at the same time for
membership in Golden Rain. The pertinent provision states, "When a
subscriber has been admitted to membership in a Mutual and has paid an
initiation fee as fixed and determined by the board of directors, he
shall be admitted to resident membership in the corporation, which
membership shall be appurtenant to his membership in the Mutual."
In going through exhibit "I," the articles of incorporation, we noted
that attached to the original draft were certain amendments. Of interest
here is the fact that each amendment carried a recitation of the number
of members entitled to cast votes for the amendment. The latest
amendment constituting a part of this exhibit was dated February 8,
1971, at which time 7,379 members were entitled to vote and did consent
to the amendment. According to the record otherwise there were at the
time of the events here material to this litigation some 20,000
residents of Leisure World scattered through 12,000 residences. From
this it appears that a substantial number of residents of Leisure World
were not members of Golden Rain during the period here involved.
The consequence of all this, of course, is that Golden Rain purported to
"subscribe" to the Leisure World News on behalf of a large number of
residents who not only had not delegated any such authority to Golden
Rain in its articles and bylaws, but who in fact were not even members
of Golden Rain. In short, what Golden Rain undertook to do by means of
the March 30, 1973, agreement was presumptuous, if not brazen, and
therefore can fairly be described as a "cosmetic subterfuge."
In any event, in May of 1973, the plaintiff's general manager sent a
letter to the presidents of each of the mutuals in Leisure World as
follows: "Last November the News-Post submitted a request to the [131 Cal.App.3d 832]
management of Leisure World to be allowed permission to distribute the
News-Post by carrier in Leisure World. We were promised that each mutual
board would be consulted at their December meetings and we would have
an answer within a month. [¶] After a luncheon with Robert Price and
several telephone inquiries, we were told late in March that our request
was denied. Further inquiries have indicated that directors of the
various mutuals have never been made aware of our request. [¶] We feel
the management of Leisure World would prefer not to have an independent
local newspaper distributed in Leisure World. Therefore they have made
it as difficult as possible for us to distribute our newspaper, and we
must go to the considerable expense of mailing to our readers. [¶] The
News-Post has published news stories that the management would prefer
not to come to the attention of the residents. However, we do not feel
the residents of Leisure World want someone else to determine what they
might read. It is unfair and discriminatory to deny to one newspaper a
privilege that is granted to another, even if the other newspaper can be
controlled. [¶] We request that your mutual board take our request
under consideration. I would be glad to appear before your board to
answer any questions your directors might have. We believe their
judgments are more representative of your residents and less influenced
by the pressures of management. [¶] I will be anxious for your reply by
mail or phone. All we want is a fair shake."
In reply thereto the then president of Golden Rain wrote some four
months later, "[u]nder date of May 11, 1973, you sent a letter to the
Presidents of all Mutual Corporations within the community of Leisure
World, Laguna Hills. Since the subject matter of your letter relates to
the community as a whole, all recipients of your letter are replying
[by] this letter. [¶] Please be advised that existing regulations have
been, since inception of Leisure World and remain so at the present
time, that delivery of newspapers within the community can be made by
your company, providing you abide by the community's rules, which
presently include the privilege extended to your newspaper to have
carriers deliver copies to each and all of your subscribers. [¶] You are
therefore permitted to deliver newspapers within Leisure World so long
as you abide by the above regulation."
The letter was also signed by the presidents of 11 of the mutuals. The
position of Golden West and Golden Rain, maintained from the time of the
agreement between Golden Rain and Birchall, Smith & Weiner, Inc.,
was that carrier delivery of the Leisure World News to every residence [131 Cal.App.3d 833]
in Leisure World was permitted by Golden Rain because each such
residence was regarded as a paid "subscriber" thereto by reason of the
March 30, 1973, agreement noted earlier. fn. 9
In this connection, we point out again that Golden Rain had neither
legal nor ostensible authority to act for any resident who was not a
member, and it is clear from the record that not every resident of
Leisure World was a member of Golden Rain.
Otherwise, we are constrained to observe that there was a period of at
least six years, i.e., from 1967 to 1973, during which there was no
"subscription" agreement and during which the Leisure World News enjoyed
a live carrier, exclusive access for give-away type newspapers within
Leisure World to the exclusion of the Laguna News-Post and other similar
publications. This circumstance was instituted and enforced by LWF, the
publisher of the Leisure World News, while LWF had a management
contract with Golden Rain which apparently well knew what was going on
and suffered it to continue. On this point, we note once more that
defendants argue that the arrangement with LWF was only an innocuous
policy of Golden Rain to provide for a "house organ." In light of such
argument, we find it significant that it was Edward Olsen himself,
president of LWF, and not someone from Golden Rain with whom a
representative of plaintiff met in an effort to break the exclusion.
Moreover, it was Olsen who stated that the exclusive access allowed the
Leisure World News was a policy explicitly adopted by LWF to recoup its
earlier losses sustained in publishing the Leisure World News. In this
connection, while Golden Rain may have owned the streets and sidewalks
within Leisure World, it was LWF which employed the security personnel
which enforced the exclusion it had instituted with no exception thereto
taken by Golden Rain.
Nevertheless, soon after the letter last quoted above was received, this litigation was begun.
Referring to Golden Rain's current petition for rehearing, we note that a
vigorous argument is again made that the Leisure World News is a "house
organ" quite different in its content and purpose from those give-away
type newspapers, including plaintiff's, which have been excluded. While
this may be true in a sense, it conveniently overlooks the compelling
feature of the Leisure World News and of those excluded [131 Cal.App.3d 834]
which is the same, namely their advertising content. More exactly, we
are not here concerned with why the Leisure World News was admitted to
Leisure World, i.e., even if as a "house organ," but why plaintiff's
newspaper was excluded.
Whether the Leisure World News is or is not a "house organ" has no
significance as a fact for consideration in reaching our decision. On
the contrary, it was the similarities of the Leisure World News and
plaintiff's newspaper which were what spawned this litigation and
necessarily provide the basis for its resolution. In other words, what
is significant is that the Leisure World News carries advertising and
that it is the only give-away type newspaper carrying advertising which
reaches the huge audience comprised of the residents of Leisure World.
It is a competitor for the advertising dollar which retailers spend in
this area of Orange County, and the fact that it has a captive audience
of 20,000 affluent people whom advertisers are trying to reach is an
overriding factor which no amount of sophistry emphasizing that the
Leisure World News is a "house organ" can evade. The consequences of
this fact are both dramatic and decisive in guiding our approach to a
decision in this case. To resort to the overworked cliche, "the bottom
line," here it is $1,873,204, which represents the gross revenues of the
publishers of the Leisure World News who started with an initial
investment of $1,000 and in just 10 years built their business to one
with the almost $2 million gross noted. No doubt good management played
an important part in this success story, but exclusive access of the
advertising in the Leisure World News to the residents of Leisure World
must be regarded as having played a decisive part in this success, even
by the most begrudging advocate. In a word, the plaintiff's newspaper
and the Leisure World News are identical insofar as they play their
roles in competing for the local advertising dollar. Moreover, it was
plaintiff's exclusion from the opportunity to compete for these
advertising revenues which raised this dispute, and, parenthetically, it
was this theory which plaintiff was precluded from presenting to the
jury in its constitutional proportions.
To summarize, then, it emerges clearly from the foregoing synopsis that
in the first instance, i.e., from 1964 up to May 1, 1972, after which
the management company, LWF, sold the Leisure World News to defendant
Golden West (then Birchall, Smith & Weiner, Inc.), that LWF, with
the tacit concurrence of Golden Rain, distributed the Leisure World News
to all residences within Leisure World by live carrier on an
unsolicited basis. Beginning in 1967, the same year in which Birchall [131 Cal.App.3d 835]
et al., started up their "shopper," LWF, with the tacit concurrence of
Golden Rain, excluded from Leisure World all other give-away type
newspapers, including plaintiff's, except those to which the residents
of Leisure World had subscribed.
From May 1, 1972, to March 30, 1973, during a time when the president of
the management company was also a shareholder in defendant Golden West,
the same arrangement continued, and the Leisure World News was accorded
exclusive live carrier circulation privileges within Leisure World to
the exclusion of plaintiff's newspaper. On the latter date, an agreement
was entered into which purported, at least in the view of George
Bouchard, a member of the Board of Directors of Golden Rain, to make all
the residents of Leisure World "subscribers" to the Leisure World News
and thus to place it arguably within the same category as other
newspapers delivered within Leisure World on a subscription basis. This
position was taken notwithstanding that all residents of Leisure World
were not then members of Golden Rain.
The facts are clear. Plaintiff was purposefully excluded from Leisure
World, and this operated to foreclose plaintiff's opportunity to
communicate its advertising to the residents of Leisure World,
notwithstanding that the Leisure World News, a similar publication, in
that it carried advertising, was afforded that opportunity. This
alignment of competitive factors must be viewed in light of the fact
that Golden West within 10 years after its predecessors became operative
with a $1,000 investment was able to generate gross advertising revenue
of $1,873,204. Whether or not the curtailment of plaintiff's
opportunity to communicate with the residents of Leisure World under
these precisely defined circumstances and thereby to be denied an equal
chance to compete for those revenues was an abridgement of its
constitutional rights of free speech and free press is the threshold
question which we must address.
IV.
Before proceeding with efforts to answer this question, we hasten to
note that such efforts have been undertaken with a full awareness that
any constitutional issue necessarily arises in the arena of a contest
between the citizen and his government. Thus, the basic issue in many
cases involving a claimed deprivation of constitutional rights is
whether or not so-called state action is present. So it is here, and
historically, the free speech, private property cases have fallen
generally into two [131 Cal.App.3d 836] groups. The first group
is comprised of the company town cases descending from Marsh v. Alabama
(1946) 326 U.S. 501 [90 L.Ed. 265, 66 S.Ct. 276], which involved an
individual who was arrested for attempting to sell religious
publications on the streets of a privately owned company town,
Chickasaw, Alabama. In the litigation which was finally resolved in the
Supreme Court of the United States, it was determined that the action of
the company in excluding private individuals from exercising their free
speech rights on the streets of the company town was unconstitutional.
Without going into an extensive recitation of the rationale of the
decision, it is enough for our purposes here to observe that the high
court looked upon the company town as tantamount to a municipality. This
imputation imported the concept of state action of a kind proscribed
under the Fourteenth Amendment, for the exercise of free speech cannot
be limited by a true municipality. On this latter proposition, reference
is made to Van Nuys Pub. Co. v. City of Thousand Oaks (1971) 5 Cal.3d 817
[97 Cal.Rptr. 777, 489 P.2d 809], which struck down a city ordinance
which prohibited unsolicited delivery to private residences of precisely
the same kind of newspaper as published by plaintiff.
Plaintiff relies heavily on certain language in Marsh in arguing that
its exclusion from Leisure World amounted to state action, entitling it
not only to injunctive relief but affording it a further claim for
damages arising under 42 United States Code section 1983. However, even
though resourceful in its arguments by analogy, plaintiff has not
persuaded us that Leisure World is a company town for purposes of
resolving the free speech, discrimination issue. There are no retail
businesses or commercial service establishments in Leisure World. It is
solely a concentration of private residences, together with supporting
recreational facilities, from which the public is rigidly barred.
However, the peculiar attributes of Leisure World which in many ways
approximate a municipality bring it conceptually close to
characterization as a company town, and such attributes do weigh in our
decision as will be later discussed.
The other line of free speech, private property cases is that involving
regional shopping centers, which, for our purposes, starts with Diamond
v. Bland [I] (1970) 3 Cal.3d 653
[91 Cal.Rptr. 501, 477 P.2d 733], followed by Lloyd Corp. v. Tanner
(1972) 407 U.S. 551 [33 L.Ed.2d 131, 92 S.Ct. 2219], which led to Diamond
v. Bland [II] (1974) 11 Cal.3d 331 [131 Cal.App.3d 837]
[113 Cal.Rptr. 468, 521 P.2d 460]. In the Diamond cases, which were an
outgrowth of an exclusion from a San Bernardino regional shopping center
of solicitors of signatures for an antipollution initiative, the court
ultimately held, because the plaintiffs had effective, alternative
channels of communication with the public, and because the solicitation
activities bore no relationship to the shopping center activities, that
it was permissible to exclude the plaintiffs. The court said, "[u]nder
these circumstances, we must conclude that defendants' private property
interests outweigh plaintiffs' own interests in exercising First
Amendment rights in the manner sought herein." (Diamond v. Bland [II],
supra, 11 Cal.3d 331, 335.)
However, that is not the last word on the subject. More recently, the
California Supreme Court, acting expressly under the California
Constitution, reversed its position on the regional shopping center,
doing so in Robins v. Pruneyard Shopping Center (1979) 23 Cal.3d 899
[153 Cal.Rptr. 854, 592 P.2d 341]. In Pruneyard, on facts strikingly
similar to those in Diamond, the court ruled that the exercise of free
speech rights unrelated to the customary commercial activities conducted
within a privately owned, regional shopping center cannot be prohibited
by the shopping center, provided the free speech activity does not
interfere with or impinge in any way upon such customary commercial
activity.
The Pruneyard case was appealed to the United States Supreme Court,
which, recently, handed down its opinion. (Pruneyard Shopping Center v.
Robins (1980) 447 U.S. 74 [64 L.Ed.2d 741, 100 S.Ct. 2035].) The United
States Supreme Court decided that our state Constitution could provide
more expansive rights of free speech than that provided by the federal
Constitution, and that the state Constitution in affording these
expanded free speech rights, as announced in Pruneyard, does not import a
violation of the shopping center owner's or tenants' property rights
under the Fifth or Fourteenth Amendments to the United States
Constitution.
Because the public is not invited but excluded from Leisure World, and
because we read Diamond [I] and Pruneyard to reach the results they do
primarily because of this feature of unlimited public access,
notwithstanding the stated basis for the decision of the United States
Supreme Court in Lloyd Corp. v. Tanner, supra, 407 U.S. 551, we have
concluded, while such cases are of no direct assistance, that they do
define certain concepts for us to build on in reaching our decision
here. [131 Cal.App.3d 838]
Pruneyard is an intriguing decision. Our Supreme Court decided that
plaintiffs' free speech rights as guaranteed by the state Constitution
had been abridged when they were excluded from a regional shopping
center, and it did so without ever once discussing or even impliedly
dealing with the phenomenon of state action except in its discussion of
Lloyd.
Proceeding from this perception of Pruneyard's content, it could be
argued that the decision, by implication, stands for the proposition, in
California, that a private individual can be held to have violated the
state constitutional rights of another, at least the latter's free
speech rights. However, we do not choose to interpret Pruneyard that
broadly, leaving it to the Supreme Court itself to do so if Pruneyard
actually was intended to extend the notions of state constitutional law
into such an unexplored salient.
It is enough to conclude here that Pruneyard, by reason of its emphasis
on the unrestricted access to the shopping center accorded the public,
held that the limitations upon plaintiff's free speech rights were
impermissibly proscribed under a rationale closely approximating that
developed in Marsh. In other words, because the public had been invited
on to private property, they would be deemed as remaining clothed with
their free speech rights secured under the state Constitution for so
long as the exercise of those rights did not impinge on the property
rights of the merchants doing business in the shopping center, all with
the result that any attempted curtailment of those rights imported the
implicit sanction of state action.
Otherwise, to emphasize the dignity of the right of free speech under
the California Constitution, Pruneyard drew upon language
from Agricultural Labor Relations Bd. v. Superior Court (ALRB) (1976) 16 Cal.3d 392
[128 Cal.Rptr. 183, 546 P.2d 687], that "all private property is held
subject to the power of the government to regulate its use for the
public welfare." (Id at p. 403.)
This ALRB case was further invoked to announce, "'We do not minimize the
importance of the constitutional guarantees attaching to private
ownership of property; but as long as 50 years ago it was already
"'thoroughly established in this country that the rights preserved to
the individual by these constitutional provisions are held in
subordination of the rights of society. Although one owns property, he
may not do with it as he pleases any more than he may act in accordance
with his personal desires. As the interest of society justifies
restraints upon [131 Cal.App.3d 839] individual conduct, so,
also, does it justify restraints upon the use to which property may be
devoted. It was not intended by these constitutional provisions to so
far protect the individual in the use of his property as to enable him
to use it to the detriment of society. By thus protecting individual
rights, society did not part with the power to protect itself or to
promote its general well-being. Where the interest of the individual
conflicts with the interest of society, such individual interest is
subordinated to the general welfare.'"' (Agricultural Labor Relations
Bd. v. Superior Court, supra, 16 Cal.3d at p. 403, ....)" (Robins v.
Pruneyard Shopping Center, supra, 23 Cal.3d 899, 906.)
Pruneyard, in further reliance on the ALRB case, observes "that the
power to regulate property is not static; rather it is capable of
expansion to meet new conditions of modern life. Property rights must be
'"redefined in response to a swelling demand that ownership be
responsible and responsive to the needs of the social whole. Property
rights cannot be used as a shibboleth to cloak conduct which adversely
affects the health, the safety, the morals, or the welfare of
others."'(16 Cal.3d at p. 404, quoting Powell,The Relationship Between
Property Rights and Civil Rights, supra, 15 Hastings L.J. at pp.
149-150.)" (Id at pp. 906-907.)
To this we add that the gated and walled community is a new phenomenon
on the social scene, and, in the spirit of the foregoing pronouncement,
the ingenuity of the law will not be deterred in redressing grievances
which arise, as here, from a needless and exaggerated insistence upon
private property rights incident to such communities where such
insistence is irrelevant in preventing any meaningful encroachment upon
private property rights and results in a pointless discrimination which
causes serious financial detriment to another.
This observation suggests that the facts of the case before us include
two additional ingredients not found in the Pruneyard mix. While the
public is not invited into Leisure World, Leisure World in many respects
does display many of the attributes of a municipality. That is to say,
although the public generally is not invited, there is substantial
traffic into Leisure World of a variety of vendors and service persons
whom the residents of Leisure World do invite in daily to accommodate
the living needs of a community this large. By this we mean to refer to [131 Cal.App.3d 840]
plumbers, electricians, refrigeration repairmen, painters, United
Parcel deliverymen, to name a few, plus the carriers of newspapers to
which the residents have subscribed.
The other ingredient noted is the exclusion of plaintiff while the
Leisure World News has been accorded unrestricted entry by Golden Rain
even though no individual resident has invited in the Leisure World
News. Suppose Golden Rain had undertaken to impose on the residents of
Leisure World a rule that only one particular plumber would be allowed
to enter Leisure World to perform this kind of service. If such an
effort were made by Golden Rain, the discrimination would be apparent to
anyone, not to mention its limitation on the residents' freedom of
choice.
Thus, the question arises as to whether the factor of discrimination is
significant. To answer this question, there is a line of constitutional
cases involving discrimination which does open the door to decision
here. Just as we have interpreted Pruneyard, these cases do find "state
action" present in an analogous way as an element affecting decision
where there is actual or even threatened enforcement by state law in aid
of discriminatory conduct. That concept is central, for instance, to
the decisions in the so-called lunch-counter cases. Equally important to
our analysis here there is a suggestion in Lloyd itself that such
concept would even apply in federal First Amendment cases. And why not?
Surely the First Amendment shares equal dignity with the Fourteenth.
Turning then in this context to Lloyd Corp. v. Tanner, supra, 407 U.S.
551, that case was a so-called shopping center case in which the
respondents undertook to distribute handbills in the interior mall area
of petitioner's large, privately owned, regional shopping center. Just
as in Pruneyard, private security guards invited the respondents to
repair to the adjoining public streets to distribute their literature.
Respondents did so and then sought an injunction against their
exclusion, claiming a violation of their First Amendment rights. The
Supreme Court of the United States reversed the judgment which granted
respondents the injunction they sought and, in so doing, held that there
had been no dedication of petitioner's privately owned and operated
shopping center to public use so as to entitle respondents to exercise
any First Amendment rights therein unrelated to the shopping center's
operations. The case further held that petitioner's property did not
lose its private character and its right to protection under the
Fourteenth Amendment [131 Cal.App.3d 841] merely because the
public had generally been invited to come into the premises for the
purpose of doing business with petitioner's tenants.
As already noted, this led to the California Supreme Court's decision in
Diamond [II], which in turn was reversed on state constitutional
grounds by Pruneyard.
However, of significance to the issue here is certain language in Lloyd
which suggested that a different result might have been reached had
there been a different scenario. In the latter portion of the decision,
the United States Supreme Court said, "The basic issue in this case is
whether respondents, in the exercise of asserted First Amendment rights,
may distribute handbills on Lloyd's private property contrary to its
wishes and contrary to a policy enforced against all handbilling. In
addressing this issue, it must be remembered that the First and
Fourteenth Amendments safeguard the rights of free speech and assembly
by limitations on state action, not on action by the owner[s] of private
property used nondiscriminatorily for private purposes only." (Lloyd
Corp. v. Tanner, supra, 407 U.S. 551, 567 [33 L.Ed.2d 131, 142];
original italics deleted, our italics added.)
The key word is "nondiscriminatorily." As an indication that this notion
was not suggested by an inadvertent choice of words, the opinion soon
thereafter states, "'The United States Constitution does not forbid a
State to control the use of its own property for its own lawful
nondiscriminatory purpose.'" (Id at p. 568 [33 L.Ed.2d at p. 142];
italics added; quoting from Adderley v. Florida (1966) 385 U.S. 39, 48
[17 L.Ed.2d 149, 156, 87 S.Ct. 242].) From this language we deduce, if
the court had been faced with a discriminatory limitation of free speech
on private property, that it may well have reached a different result.
Returning to California cases, our analysis brings us to Mulkey v. Reitman (1966) 64 Cal.2d 529
[50 Cal.Rptr. 881, 413 P.2d 825]. That celebrated case struck down as
unconstitutional Proposition 14 which appeared on the statewide ballot
in 1964. That measure, adopted by popular vote, sought to restrict the
power of the state to legislate against the right of any person,
desiring to sell, lease or rent his real property, "to decline to sell,
lease or rent such property to such person or persons as he, in his
absolute discretion, chooses." (Former Cal. Const., art. I, § 26.) [131 Cal.App.3d 842]
This proposition was a direct reaction to the Hawkins Act and the
subsequent Rumford Fair Housing Act which were aimed at eliminating
racial discrimination in housing. The legal effect of Proposition 14 was
to nullify these legislative efforts as they applied to discrimination
in the housing market of California. The California Supreme Court in
Mulkey exhaustively marshaled the authorities to demonstrate the
presence of state action in the operation of Proposition 14 so as to
bring it within the equal protection clause of the Fourteenth Amendment.
Relying in the first instance on Shelley v. Kraemer (1948) 334 U.S. 1
[92 L.Ed. 1161, 68 S.Ct. 836, 3 A.L.R.2d 441], the court in Mulkey said,
"Shelley, and the cases which follow it, stand for the proposition that
when one who seeks to discriminate solicits and obtains the aid of the
court in the accomplishment of that discrimination, significant state
action, within the proscription of the equal protection clause, is
involved." (Mulkey v. Reitman, supra, 64 Cal.2d 529, 538.)
Mulkey went on to observe, "It must be recognized that the application
of Shelley is not limited to state involvement only through court
proceedings. In the broader sense the prohibition extends to any
racially discriminatory act accomplished through the significant aid of
any state agency, even where the actor is a private citizen motivated by
purely personal interests. [Citing Burton v. Wilmington Pkg. Auth.
(1961) 365 U.S. 715, 722 (6 L.Ed.2d 45, 50-51, 81 S.Ct. 856).]" (Id at
p. 538.)
Other cases relied upon in Mulkey demonstrate the nature and extent of
just what it meant by significant state involvement so as to bring
essentially private conduct dependent on state implementation within the
ambit of proscriptions on unconstitutional state action included:Evans
v. Newton (1966) 382 U.S. 296 [15 L.Ed.2d 373, 86 S.Ct. 486];Terry v.
Adams (1953) 345 U.S. 461 [97 L.Ed. 1152, 73 S.Ct. 809];Robinson v.
Florida (1964) 378 U.S. 153 [12 L.Ed.2d 771, 84 S.Ct. 1693]; and Anderson
v. Martin (1964) 375 U.S. 399 [11 L.Ed.2d 430, 84 S.Ct. 454].
The end result in Mulkey was to declare unconstitutional Proposition 14
because it operated to deny the plaintiffs equal protection of the laws
in a case where the trial court had awarded a summary judgment against
them in an action seeking relief under sections 51 and 52 of the Civil
Code as those sections then read.
When Mulkey and the alternative scenario in Lloyd are viewed along with
the "state action" implications of Pruneyard, the outline of a workable [131 Cal.App.3d 843]
rule emerges for application to the facts of the case before us. Its
rationale derives from the differential view of "state action" as
characterized in the discrimination cases when compared to that in other
constitutional cases. In this case, while Leisure World is not a
"company town" so as to require that it yield to the results reached in
Marsh, it is a hybrid in this sense. fn. 10
The question then becomes, notwithstanding that the public is generally
excluded except upon invitation of the residents, whether its town-like
characteristics compel Golden Rain's yielding to certain constitutional
guarantees as a consequence of its adding discrimination to the
picture. When that element is added, the balance tips to the side of the
scale which imports the presence of state action per Mulkey and the
lunch counter cases. In other words, Golden Rain, in the proper exercise
of its private property rights, may certainly choose to exclude all
give-away, unsolicited newspapers from Leisure World, but once it
chooses to admit one, where that decision is not made in concert with
the residents, then the discriminatory exclusion of another such
newspaper represents an abridgement of the free speech, free press
rights of the excluded newspaper secured under our state Constitution.
In the current petition for rehearing Golden Rain devotes considerable
ink in support of its contention that there could have been no
discrimination practiced against plaintiff's newspaper because
"Discrimination presupposes meaningful similarity." We are indebted to
counsel for Golden Rain for supplying us the concise terms we have
labored to locate. "Meaningful similarity," that's it! On the undisputed
facts before us there could be no more meaningful similarity possible
than emerges in the comparison of the Leisure World News and plaintiff's
newspaper. That meaningful similarity lies in their common role as
competitors for the advertising dollars to be spent in this marketing
area, an area where the Leisure World News has exclusive access to the
residents of Leisure World and from where plaintiff was barred from
making the unsolicited deliveries available to the Leisure World News.
Thus, the legal conclusion that there was unconstitutional
discrimination practiced against plaintiff's newspaper is inescapable.
Based upon the foregoing, keeping in view the greater status of the
rights of free speech and free press existing under the California
Constitution [131 Cal.App.3d 844] as delineated in Pruneyard, and
keeping in mind also that discriminatory proscription of free speech on
private property may even be questionable under the federal
Constitution, as suggested by Lloyd, we hold that Golden Rain, acting
with the implicit sanction of the state's police power behind it,
impermissibly discriminated against the free speech and free press
rights of plaintiff, guaranteed to it under the state Constitution, by
excluding it from Leisure World after it, Golden Rain, without authority
from the residents of Leisure World, had chosen to permit the
unsolicited delivery of the Leisure World News to the residents of
Leisure World. As a consequence, for so long as Golden Rain permits the
unsolicited fn. 11
delivery of the Leisure World News to the residents of Leisure World,
then it cannot permissibly discriminate against plaintiff's opportunity
to communicate with the residents of Leisure World by excluding
unsolicited delivery of its newspaper to these same residents.
V.
Defendant Golden Rain has argued that to subject the residents of
Leisure World to unsolicited delivery of plaintiff's newspaper would
frustrate their investment expectations of privacy and freedom from the
intrusions of those who have not been invited, citing Kaiser Aetna v.
United States (1979) 444 U.S. 164 [62 L.Ed.2d 332, 100 S.Ct. 383].
Without more we would agree with such contention; however, it was the
management of Leisure World itself which let down the bars, and Golden
Rain which suffered the discrimination to continue. It was thus the
choice of Golden Rain which resulted in the threat of any claimed
encroachment on the privacy of the residents of Leisure World. In this
vein, it is pertinent to observe, if the residents of Leisure World do
not want unsolicited, give-away newspapers delivered to their homes by
live carrier, then Golden Rain should cease its discrimination and
exclude them all, including the Leisure World News.
Actually, as a practical matter, in response to the turgid rhetoric
about the imposition on privacy and property rights which admission of
plaintiff's newspaper to Leisure World would supposedly represent, it is
fair to say that there would be no imposition of substance.
Parenthetically, [131 Cal.App.3d 845] what we see happening is
plaintiff's delivery personnel being screened in the same way that the
carriers of the Los Angeles Times are screened; we see plaintiff's
delivery personnel being instructed that they are permitted to move
about the streets of Leisure World during certain daylight hours on
certain days; we see plaintiff's delivery personnel placing copies of
the Laguna News-Post on the front steps or porch of each residence of
Leisure World in much the same manner as would a United States Postal
Service employee deliver the newspaper if it were mailed in. This hardly
represents an assault upon the privacy of any resident of Leisure World
beyond what is already occurring, especially when no resident of
Leisure World has actually requested delivery of the Leisure World News
either.
Nevertheless, if this activity represents an unacceptable intrusion upon
the privacy of the residents of Leisure World, a privacy which it is
argued they paid for when they bought homes there, then Golden Rain
should cease its discrimination and exclude all newspapers to which
individual residents have not personally subscribed.
The rule we announce as the basis for resolution of this phase of the
case will not result in requiring unrestricted admittance to Leisure
World of religious evangelists, political campaigners, assorted
salespeople, signature solicitors, or any other uninvited persons of the
like. It will compel admission only of those who wish to deliver a
newspaper like the Leisure World News, "like" in the sense that it is a
competitor of Leisure World News for the same advertising dollars to be
spent by businesses in Southern Orange County. In short, for purposes of
avoiding discrimination against the state constitutional guarantees of
free speech and free press, the right of any and all to enter this
private, gated community to exercise this state constitutional right
must be exactly measured by the right accorded to one, both as to the
nature of the activity of that one as well as to the conditions of his
admission. Under such a rule, the owners of this private property still
remain in complete control of who shall enter Leisure World, while
Golden Rain is yet required only to act fairly and without
discrimination toward others in the exercise of their state
constitutional rights of free speech and free press which rights Golden
Rain itself has chosen to accord exclusively to the Leisure World News
while acting wholly beyond the knowledge and complicity of any resident
of Leisure World. [131 Cal.App.3d 846]
VI.
In one of the earlier petitions a worried concern was voiced that the
rule here announced would confer a kind of "equal time" entitlement on
any who wished to enter should persons of opposite or different views
have been "invited" into Leisure World to speak or to entertain. To note
these objections to the rule is itself enough to demonstrate how wide
they are of the mark. The rule we have announced has nothing to do with
instances where persons are invited into Leisure World by its residents.
The premise on which the rule here announced has derived is the
discrimination by Golden Rain which has allowed an exclusive opportunity
to Golden West to deliver its Leisure World News to the residents of
Leisure World where, as to those residents individually, such deliveries
are wholly unsolicited. To this extent, Golden Rain, with absolutely no
advice from or consultation with the actual residents, by its own
choice and not that of the residents, has rendered Leisure World an area
where a singular member of the public is admitted for this limited
purpose. Thus, the rule has absolutely no application to any person who
or activity which the residents of Leisure World may choose to invite to
come in.
The principal argument advanced by Golden Rain in its earlier petition
for rehearing which challenged our initial decision was also that it
contravened constitutionally guaranteed rights to privacy and freedom of
association. No good purpose would be served here to respond
specifically to each of the points contained in the 10 pages of learned
constitutional discourse offered under point IV of Golden Rain's earlier
petition for rehearing except to say that we can only agree with the
propositions there recited. The problem with the petition is that it
ignores the realities of this case.
We have already noted the letter directed to plaintiff by the president
of Golden Rain which closed with the statement that "you are therefore
permitted to deliver newspapers within Leisure World so long as you
abide by the above regulation" which meant that plaintiff could enter
Leisure World and deliver its newspaper to any of its "subscribers." Of
course, we all know that in the nature of things there are no
"subscribers" to give-away newspapers which subsist entirely by
advertising. However, the point remains that Golden Rain specifically
indicated that it had no objection to associating with plaintiff's
carriers provided those carriers were inside the gates of Leisure World
solely to deliver plaintiff's newspaper to its "subscribers." Just how
these very same carriers [131 Cal.App.3d 847] would ipso facto
become a threat to the freedom of association and right of privacy
within Leisure World just because they would be delivering plaintiff's
newspaper on an unsolicited instead of a subscription basis escapes us.
Similarly, much is made of the fact that residents of Leisure World
actually performed the distribution of the Leisure World News, the
implication being that some infectious, undisciplined rabble would
overrun Leisure World if plaintiff were allowed to distribute its
newspaper there. fn. 12
If this is truly a concern, we see no legal problem in Golden Rain's
imposing a regulation which would require employment of only Leisure
World residents for delivery of any unsolicited publication. This would
fall well within the ambit of Justice Traynor's time, place, and manner
rule in Hoffman. fn. 13
Otherwise, Golden Rain could prescribe that any resident who elected
not to receive the unsolicited delivery would need only notify Golden
Rain of such wishes and that would terminate delivery at that residence.
The significant point is that we see nothing in the record which
indicates that the individual residents of Leisure World have expressed
themselves on what give-away newspaper is to be allowed to enter and
what ones are to be excluded. The discriminatory exclusion has been
imposed solely by the owner of the common areas, i.e., the owner of the
streets and sidewalks, not the owners of actual residences. Thus, we are
forced to conclude that the real reason for the exclusion of the
plaintiff's newspaper had and continues to have little if anything to do
with an actual concern for the preferences of the residents as to whom
they shall associate with. In short, at the time this litigation began
and continuing to the present, the distribution to the residents of
Leisure World of the Leisure World News was and is just as much
unsolicited by them as was and is that of the Laguna News-Post. fn. 14 [131 Cal.App.3d 848]
VII.
Based upon the foregoing discussion of points IV, V and VI, the trial
court's denial of plaintiff's application for an injunction to end its
exclusion from Leisure World will be reversed.
Having determined that there is a legal basis for reversal as discussed
above, there is no need to address plaintiff's other contention that
state action was implicit from the fact that Leisure World was developed
with federally insured financing.
Damages for the Constitutional Deprivation
I.
[2] Because we do not wish to extend this opinion beyond its already
inordinate length, it is enough to observe here that we agree with the
trial court and hold that plaintiff neither pleaded nor proved a right
to damages under 42 United States Code section 1983. That section
provides for recovery of damages against any person "who, under color of
any statute, ordinance, regulation, custom, or usage, of any State ...
subjects, or causes to be subjected, any citizen of the United States
... to the deprivation of any rights, privileges, or immunities secured
by the Constitution and laws" of the United States. Under our decision
we have ruled that there has been no deprivation of any right, privilege
or immunity secured by the Constitution and laws of the United States.
In other words, it is an answer to plaintiff's claim of right to an
opportunity to prove alleged damages under 42 United States Code section
1983 to observe that the discrimination which we hold was here
practiced was solely with reference to the plaintiff's free-speech,
free-press rights secured under the California Constitution. To this,
plaintiff could conceivably respond that in our decision we have noted a
suggestion in Lloyd Corp. v. Tanner, supra, 407 U.S. 551, that
discriminatory conduct in a First Amendment context might well have led
to a different result, and that therefore we must further decide
explicitly, because we have held "state action" to have been present in
plaintiff's exclusion [131 Cal.App.3d 849] from Leisure World,
whether a federal constitutional right was abridged in order to afford a
full and complete disposition of plaintiff's claim to damages under the
federal civil rights statute. To this we say again that no federal
right is here involved and that Lloyd only suggested the thread by which
the knot was unraveled. Moreover, it is enough to decide, which we do,
that the "state action" necessary to import the sanction of
constitutional restraint dictated by the Constitution of California is
not coextensive with and is something less than that degree of conduct
sufficient to entitle one to a right of action for damages under 42
United States Code section 1983 where a federal right allegedly has been
violated.
Just what that quantum of difference is we need not define. Because of
the special dignity accorded the rights of free speech arising under the
California Constitution as announced in Pruneyard, it is enough to
state that the difference is readily recognizable here, and it is the
more recognizable because of the palpably serious economic consequences
which were caused by Golden Rain's discriminatory exclusion of
plaintiff's newspaper from Leisure World.
II.
[3] Although plaintiff has no claim to damages under the federal civil
rights statute, because we have decided that it was constitutionally
impermissible under the California Constitution for Golden Rain to
exclude plaintiff's newspaper from Leisure World after it had for years
allowed exclusive access to Leisure World by the Leisure World News, it
remains to be decided if there is any other theory upon which plaintiff
could be entitled to damages.
Plaintiff contends that the court compounded the error of its December
5, 1971, ruling by means of amplifying remarks made at the time it
granted the defense motion above noted in which remarks it stated that
there was no right to money damages in any event because the state
constitutional right, if there were one, is not "self-executing."
It is clear from the record that the trial court at the time of the
ruling of December 5, 1977, was of the view, based solely on the
pleadings, and in light of the six factual items earlier noted as deemed
to be without substantial controversy, that plaintiff was not entitled
to money damages even if the court were to rule that there had been an
abridgement of plaintiff's constitutional free speech and free press
rights; [131 Cal.App.3d 850] hence, the prohibition of any references thereto in the presence of the jury. fn. 15
In other words, plaintiff contends that the trial court erred in denying
it the opportunity to put on evidence of the damages which it incurred
as a result of the abridgement of its right of free speech, and we
assume, for the sake of analysis, that the plaintiff has suffered
actual, [131 Cal.App.3d 851] demonstrable, compensatory damages
arising solely from its exclusion from Leisure World and could have
proved such damages had it been permitted to put on such evidence.
The issue, as posed by the parties' briefs, therefore, is whether the
free speech clause of the California Constitution (art. I, § 2) affords a
right to money damages without the benefit of enabling legislation. fn. 16
Passing for the moment that both the plaintiff and the trial court have
mistakenly equated the right to money damages for a constitutionally
defined grievance with the "self-executing" nature or lack of it in the
California Constitution, we note that great emphasis is placed by
plaintiff on the right-to-privacy cases as supporting its position.
In Porten v. University of San Francisco (1976) 64 Cal.App.3d 825
[134 Cal.Rptr. 839], dealing with the new state constitutional
provision assuring the individual right to privacy (art. I, § 1), the
court said, "The constitutional provision is self-executing; hence it
confers a judicial right of action on all Californians. (White v. Davis,
supra, 13 Cal.3d at p. 775 [120 Cal.Rptr. 94, 533 P.2d 222].) Privacy
is protected not merely against state action; it is considered an
inalienable right which may not be violated by anyone. [Fn. omitted.]
(See Annenberg v. Southern Cal. Dist. Council of Laborers (1974) 38 Cal.App.3d 637 ...." (Id at pp. 829-830.)
In Porten the plaintiff sought damages against the University of San
Francisco for its alleged infringement of his right to privacy when it
disclosed to a state agency his grades earned at Columbia before
transferring to San Francisco. In applying the rule above recited, the
appellate court reversed the trial court's judgment of dismissal after
sustaining of a general demurrer. From this we conclude that plaintiff
was thereafter afforded an opportunity to put on evidence of any damages
he had suffered by reason of the infringement upon his constitutional
rights to privacy.
The self-executing nature of the constitutional provision above noted as
recited in Porten was confirmed in passing by Justice Sims in [131 Cal.App.3d 852] Emerson v. J. F. Shea Co. (1978) 76 Cal.App.3d 579,
591 [143 Cal.Rptr. 170]. It is also recognized with approval by Witkin.
He writes, "... it has been declared that a [state] constitutional
provision will now be presumed to be self-executing, and will be given
effect, without legislation, unless it clearly appears that this was not
intended." (5 Witkin, Summary of Cal. Law (8th ed. 1974) Constitutional
Law, § 38, p. 3278.)
Having moved through this exposition of cases dealing with the
right-to-privacy amendment to the California Constitution, we must
observe that the issue remains, without more, unresolved; after
all,White v. Davis, supra, 13 Cal.3d 757,
775, the leading case which passed upon and construed the consequences
of the new amendment, and upon which Porten relied, was an injunction
case.
Here, we part company with our decision after the first rehearing. In
that opinion we proceeded to discredit Porten as authority by way of
analogy for allowing money damages for violation of other state
constitutional rights because, as we stated, the right to privacy had
previously existed as a common law right.
In its current petition for rehearing, the plaintiff has effectively
demonstrated that we were wrong in such latter pronouncement, and we
must therefore retract it. In such petition plaintiff has directed our
attention to Melvin v. Reid (1931) 112 Cal.App. 285 [297 P. 91], which
reversed a judgment of dismissal, after a demurrer had been sustained,
in an action which included a count for damages brought over 50 years
ago under section 1 of article I of the California Constitution and
based on allegations that a right of privacy had been illegally
encroached upon. This, of course, was long before the 1973 amendment
construed by White, relied upon in Porten.
In the course of its decision, the Melvin court categorically rejected
the suggestion, insofar as California is concerned that a right of
privacy existed as common law. The court went on to say, "We find,
however, that the fundamental law of our state contains provisions
which, we believe, permit us to recognize the right to pursue and obtain
safety and happiness without improper infringements thereon by others.
[¶] Section 1 of article I of the Constitution of California provides as
follows: 'All men are by nature free and independent, and have certain
inalienable rights, among which are those of enjoying and defending life
and liberty; acquiring, possessing and protecting property; and
pursuing and [131 Cal.App.3d 853] obtaining safety and
happiness.' [¶] The right to pursue and obtain happiness is guaranteed
to all by the fundamental law of our state. This right by its very
nature includes the right to live free from the unwarranted attack of
others upon one's liberty, property, and reputation. Any person living a
life of rectitude has that right to happiness which includes a freedom
from unnecessary attacks on his character, social standing or reputation
.... We believe that the publication by respondents of the unsavory
incidents in the past life of appellant after she had reformed, coupled
with her true name, was not justified by any standard of morals or
ethics known to us and was a direct invasion of her inalienable right
guaranteed to her by our Constitution, to pursue and obtain happiness.
Whether we call this a right of privacy or give it any other name is
immaterial because it is a right guaranteed by our Constitution that
must not be ruthlessly and needlessly invaded by others." (Id at pp.
291-292.)
From the foregoing, it is too plain for argument that our state
Constitution has been interpreted to support an action for damages for a
violation of rights arising under old section 1, article I, and that
such an action was possible without the need for enabling legislation.
In reliance thereon and because of the special dignity accorded the
rights of free speech and free press under the California Constitution,
whether they be described as "inalienable" rights or not, it is not
illogical in view of Melvin to hold, which we do, that a direct right to
sue for damages also accrued here by reason of plaintiff's exclusion
from Leisure World, and that it accrued under article I, section 2 of
the California Constitution.
Counsel for plaintiff has persuasively pointed out further, accepting
that plaintiff has suffered a violation of its state constitutional
rights, that Civil Code sections 1708 and 3333 together also provide a
predicate for recovery of money damages in instances of such violations.
Section 1708 provides that "[e]very person is bound, without contract,
to abstain from injuring the person or property of another, or
infringing upon any of his rights."
Section 3333 provides that "[F]or the breach of an obligation not
arising from contract, the measure of damages, except where otherwise
expressly provided by this Code, is the amount which will compensate for
all the detriment proximately caused thereby, whether it could have
been anticipated or not." [131 Cal.App.3d 854]
The question then is whether the constitutionally protected right of
plaintiff which we have held to have been violated comes within the
ambit of section 1708. We can find no good reason why it does not, and
so as pointed out by plaintiff, it follows "as night follows day," that a
violation of that right imports by reason of section 3333 a correlative
right to recover any damages proximately resulting from the violation
of such right, keeping in perspective that we regard the constitutional
violation here as having arisen from plaintiff's discriminatory
exclusion from Leisure World with the implicit sanction of state action
behind such exclusion.
Based upon the foregoing, it was error for the trial court to foreclose
the plaintiff's right to present evidence of damages it sustained as
allegedly arising from the unconstitutional exclusion of its newspaper
from Leisure World.
III.
[4] Having concluded that it was constitutionally impermissible for
Golden Rain to discriminate against plaintiff's newspaper by excluding
it from Leisure World, we next decide whether the trial court, upon a
new trial, should entertain plaintiff's efforts to prove damages on the
further theory that Golden Rain and Golden West allegedly acted in
concert unconstitutionally to limit access to Leisure World only to the
Leisure World News to the exclusion of plaintiff's newspaper and thereby
brought about an unreasonable restraint of trade.
The plaintiff in its opening brief argues that the error of December 5,
1977, was also compounded because plaintiff was not allowed to introduce
evidence in support of or to argue to the jury a theory of relief based
upon a "conspiracy to deprive plaintiff of [its] constitutional rights
[of free speech] as overt acts" such as to qualify as a violation of the
Cartwright Act.
Referring to the trial already had, it logically followed, in view of
the trial court's order in limine, that the jury did not consider the
wrongful discriminatory exclusion from Leisure World of plaintiff's
newspaper as an element in connection with its finding or not finding a
conspiracy or combination resulting in an unreasonable restraint of
trade as alleged by plaintiff in the fourth amended complaint. However,
because we have concluded that such discriminatory exclusion was
wrongful, it necessarily [131 Cal.App.3d 855] follows that the
court erred in applying its December 5, 1977, order so as to prevent the
plaintiff from adverting in the presence of the jury to the
constitutional deprivation as an element of its theory of grievance
against both defendants. This limitation was necessarily reflected in a
refusal to instruct the jury in keeping with what we have here held to
be plaintiff's unconstitutional exclusion from Leisure World.
In arguing the Cartwright Act phase of the case to us, defendant has
repeatedly asserted that an illegal restraint of trade does not require
that the overt acts of the individuals themselves be illegal. While this
may be true as a general proposition, it is an irrelevant if not
diversionary argument here. As we understand plaintiff's position, it
contends that the trial court erred in preventing it from arguing the
unconstitutional nature of plaintiff's exclusion as only one element for
the jury to weigh in deciding whether the restraint implicit in the
exclusion was unreasonable. We agree. In other words, just because an
unreasonable restraint can arise from legal overt acts does not mean
that an unreasonable restraint cannot arise from illegal overt acts.
Thus, there can be no question that the discrimination against the
Laguna News-Post in the form of its unconstitutional exclusion from
Leisure World presented an additional circumstance which the jury should
have considered under such instructions as would have enabled it to
decide if there had been acts in concert by two or more persons to carry
out an unreasonable restraint on trade or commerce. (Bus. & Prof.
Code, § 16720.) If the jury were to find that there were such an
unreasonable restraint, then the consequences thereof would be governed
by Business and Professions Code section 16750 under which the jury
would be entitled to decide further whether the plaintiff was injured in
its business by reason of any such unreasonable restraint found to have
occurred as defined by Business and Professions Code section 16720.
Because of the error of the trial court at the outset as represented by
its order of December 5, 1977, all of the urgings of Golden West in its
petition for rehearing about there being substantial evidence to support
the jury's verdict which held against plaintiff on its theory of an
illegal combination in restraint of trade are meaningless. The ground
rules under which the jury decided the case were wrong, and plaintiff,
should it seek a new trial, is entitled to try to prove that Golden West
participated [131 Cal.App.3d 856] in influencing Golden Rain's
unconstitutional exclusion of the plaintiff's newspaper from Leisure
World and to try to prove additionally that this resulted in an
unreasonable restraint of trade which proximately caused damages to the
plaintiff for the applicable period not barred by the statute of
limitations.
Unless there were such complicity which resulted in an unreasonable
restraint of trade and commerce, no violation of section 16750 of the
Business and Professions Code occurred. Otherwise, even though the
appeal has been dismissed as to Golden West, plaintiff is still entitled
to pursue the foregoing theory against Golden Rain as a possible
participant in the alleged conspiracy.
The Remaining Issues
On the factual issues actually tried to the jury on the cross-complaint
under the Cartwright Act and the Unfair Trade Practices Act, there was
substantial evidence abounding to sustain the jury's verdicts on the
cross-complaint, and we see no good purpose to be served in pursuing a
detailed recitation of such evidence. The judgment in that respect is
affirmed.
Disposition
Item No. 5 deemed to be without substantial controversy is stricken,
there being absolutely no evidence in the record to support such a
determination. Insofar as the judgment denied plaintiff's application
for an injunction to terminate its exclusion from Leisure World, the
judgment is reversed with directions. The trial court is directed to
enter a new and different judgment granting such application on terms
and conditions substantially as follows: For so long as Golden Rain or
any other entity, exercising a power of control over the right of entry
into Leisure World, authorizes or suffers the unsolicited, live carrier
delivery of any give-away type newspaper, including the Leisure World
News, to any residence in Leisure World where any occupant thereof has
not personally requested or subscribed to such delivery, the plaintiff
shall be entitled to enter Leisure World for the purpose of delivering
its newspaper, unsolicited, to any such residence in Leisure World,
provided nevertheless that such delivery shall be under the same rules
and regulations as to time, place, and manner as apply to the delivery
of e.g., the Los Angeles Times and other newspapers offered for sale to
subscribers, and provided further that if any resident of Leisure World
shall expressly [131 Cal.App.3d 857] state in writing to Golden
Rain or to the management of Leisure World that he or she does not wish
to receive unsolicited delivery of the Laguna News-Post to his or her
residence, then plaintiff shall refrain thereafter from any delivery to
that resident. In this latter instance, plaintiff shall be entitled to
verify independently by telephone call or personal visit that any given
resident does not wish to receive unsolicited delivery of the Laguna
News-Post.
Because we have decided that plaintiff's exclusion from Leisure World
was unconstitutional discrimination and therefore wrongful as a matter
of law, the trial court is further directed, upon due application of
plaintiff, to try, with a jury if requested, those issues of damages
arising from the illegality of the exclusion of the Laguna News-Post
from Leisure World, namely: (1) whether plaintiff suffered any damages
caused by its illegal exclusion from Leisure World as measured by
sections 1708 and 3333 of the Civil Code; (2) whether there was any
concerted action or agreement between Golden Rain and Golden West, per
section 16720, subdivision (a) of the Business and Professions Code,
which caused the unconstitutional exclusion of the Laguna News-Post from
Leisure World such as to constitute an unreasonable restraint of trade;
and (3) whether there were any actual damages proximately resulting
from any such unreasonable restraint of trade over the four years next
preceding the filing of the action for assessment per section 16750.1 of
the Business and Professions Code.
Except as reversed with directions above, the judgment is affirmed, and each party shall bear its own costs on appeal.
Gardner, J., concurred.
KAUFMAN, Acting P. J., Concurring and Dissenting
Somewhat reluctantly, fn. 1
I concur in the opinion and judgment except insofar as it holds that a
discriminatory violation of a newspaper's constitutional right to
freedom of the press gives rise to a direct cause of action for damages
outside the parameters of recognized tort law and independent of the
statutory law dealing with unlawful restraints of trade and unfair
business practices. Not a single case or authority so holding is cited
for that novel proposition, and the authorities that are cited in
support of it are neither compelling nor persuasive. [131 Cal.App.3d 858]
Even if the majority were correct that the provision in the California
Constitution guaranteeing freedom of the press (art. I, § 2, subd. (a))
is self-executing, that would not automatically and necessarily result
in the conclusion that a violation of that right gives rise to a cause
of action for damages. Self-executing means no more than that the
constitutional right will be enforced without enabling legislation. The
fact that a constitutional provision is self-executing does not
establish the remedies that are available for its enforcement.
Injunctive or declaratory relief may be available to the exclusion of
money damages.
Moreover, it is clear that the free press provision of the California
Constitution is not self-executing, at least in the sense that its
violation gives right to a direct cause of action for damages.
Subdivision (a) of section 2 of article I provides: "Every person may
freely speak, write and publish his or her sentiments on all subjects,
being responsible for the abuse of this right. A law may not restrain or
abridge liberty of speech or press." (Italics added.) A constitutional
provision may be regarded as self-executing "if the nature and extent of
the right conferred and the liability imposed are fixed by the
Constitution itself, so that they can be determined by an examination
and construction of its terms ...." (Taylor v. Madigan (1975) 53 Cal.App.3d 943, 951 [126 Cal.Rptr. 376]; accord; Chesney v. Byram (1940) 15 Cal.2d 460, 462 [101 P.2d 1106]; Flood v. Riggs (1978) 80 Cal.App.3d 138,
154 [145 Cal.Rptr. 573].) Obviously, the language "a law may not
restrain or abridge liberty of ... press" falls a bit short of fixing
the "extent of the right conferred" and, a fortiori, "the liability
imposed." Indeed, inasmuch as the prohibition is against abridgement of
the right by "[a] law," it is problematical whether the constitutional
provision has any application to the conduct of nongovernmental
entities.
The last observation is pertinent also to the fundamental distinction
between the case at bench and the right of privacy cases cited by the
majority. The initiative constitutional amendment to section 1 of
article I of the California Constitution, adding privacy to the
enumerated inalienable rights, fn. 2 had a unique "legislative" history that indicated the [131 Cal.App.3d 859]
provision was meant to protect the right of privacy against unlawful
intrusions by either governmental or private entities and was intended
to be enforceable without more. (See White v. Davis (1975) 13 Cal.3d 757, 773-776 [120 Cal.Rptr. 94, 533 P.2d 222]; Porten v. University of San Francisco (1976) 64 Cal.App.3d 825,
829 [134 Cal.Rptr. 839].) The courts in both the White and Porten
decisions relied entirely on that unique "legislative" history in
determining that the provision establishing an inalienable right to
privacy was self-executing and, apparently in Porten, that its violation
gives rise to a direct cause of action for damages. Thus those
decisions constitute no authority for a damage action based on article
I, section 2, subdivision (a). Neither does the observation in Emerson
v. J. F. Shea Co. (1978) 76 Cal.App.3d 579,
591 [143 Cal.Rptr. 170], that in White the court indicated that the
constitutional amendment adding privacy to the list of inalienable
rights was intended to be self-executing.
Civil Code section 3333 is not a substantive statute; it merely
prescribes the general measure of damages in tort cases. Civil Code
section 1708 which provides that every person is bound to abstain from
injuring the person or property of another or infringing any of his
rights, states a general principle of law, but it hardly provides
support for the adoption of the novel legal proposition that a violation
of subdivision (a) of section 2 of article I of the California
Constitution gives rise to a direct cause of action for damages outside
the parameters of recognized tort law and independent of the statutory
law governing unlawful restraints on trade and unfair business
practices.
FN 1.
All the evidence in the record is to the contrary, and so No. 5 above
will be ordered stricken. The actual fact is that the Leisure World News
was and at all times has been admitted to Leisure World without any
expression of assent or invitation by any resident of Leisure World
whatsoever.
FN 2.
Our information supplied by counsel was that plaintiff had sold its
newspaper to Media General, a publishing company which had previously
purchased the assets of Golden West. In this connection, we were further
informed by counsel for plaintiff that Laguna Publishing Company had
nevertheless retained ownership of its causes of action against both
Golden Rain and Golden West; however, we were further advised that
Laguna Publishing Company, as a condition of the sale of its newspaper
to Media General, was required to negotiate a settlement with Golden
West.
Thereafter, we were informed that a settlement had been reached and that
the superior court had confirmed it within the contemplations of
sections 877 and 877.6 of the Code of Civil Procedure. Following those
proceedings, the appeal as to Golden West was dismissed October 27,
1981.
FN 3.
Following the filing of our initial opinion, it would not require much
imagination to suppose that Golden Rain would undertake directly or
would authorize others to solicit personally each residence in Leisure
World for the purpose of obtaining something in writing from each,
specifically requesting delivery of the Leisure World News to that
residence. If this were done, the import of this decision would require
that the same opportunity to solicit each residence in Leisure World be
accorded to plaintiff.
FN 4.
Because the determination of the constitutional issue is and always has
been an issue of law, both in the trial court and before us, we have
now reached a point of aggravated impatience with counsel for Golden
Rain because of their dogged advocacy on this point as illustrated by a
statement in the current petition for rehearing, namely, "The legal
principles coined by the Court are constructed on the Court's own
independent fact searching and drawing of inferences in derogation of
established rules of appellate review. As a consequence, the Court has
become an advocate for plaintiff." Such intemperate and wholly
inaccurate assertions are of no aid to us in the task of trying to
decide a difficult case.
FN 5.
In the earlier petitions of both defendants for rehearing this
statement of fact in our original opinion was challenged as unsupported
by the record. Golden West argued that the jury's verdict and the
court's findings are to the contrary, explicitly pointing out that the
trial court found there was no conspiracy. That argument begs the
question, for such finding is based on the previous legal determination
of the court that no constitutional deprivation was involved in the
exclusion of plaintiff's newspaper. In any case, the facts recited above
do not necessarily describe a conspiracy.
FN 6.
At the initial oral argument, Mr. Watson, appearing for Golden West,
referred us to pages 31-35 of Golden West's petition for rehearing as
demonstrating by citations to the record a refutation that Mr. Olsen had
stated that the reason for the policy which excluded all give-away
newspapers except the Leisure World News was to enable LWF to recoup the
losses it had suffered in earlier years. We have with exacting
particularity gone through the record cited by Mr. Watson, and
otherwise, and can find nothing which directly contradicts the testimony
of Mr. Moses at reporter's transcript volume XXIII, p. 5772, lines
9-14. Just because Mr. Olsen testified that he did not recall what was
said 10 years earlier does not disprove the Moses testimony. Moreover,
we must again point out that arguments about substantial evidence on
this point are meaningless because the court had ruled in limine that no
constitutional right had been abridged by excluding plaintiff's
newspaper. Accordingly, the necessary starting point in any analysis of
the constitutional issue is a hypothesis which must ignore any findings
of fact as meaningless to this issue.
FN 7.
As a consequence of other litigation, the stock in Birchall, Smith
& Weiner, Inc., acquired by Olsen and Musch was later restored to
Smith and Birchall.
FN 8.
There appears to be a disparity of viewpoint between the two defendants
as to the import of this agreement. Golden Rain in its earlier petition
for rehearing states, "Nothing in the agreement designates the
residents of Leisure World as 'subscribers.'" On the other hand, Golden
West in its petition for rehearing quotes at length the testimony of
George Bouchard of Golden Rain to the effect that it was the intent of
the agreement to make the residents of Leisure World "subscribers" to
the Leisure World News. Otherwise, in the body of Golden West's petition
for rehearing references are made repeatedly to the "subscription
agreement."
FN 9. See footnote 8 where we referred to the testimony of George Bouchard to this effect.
FN 10.
Leisure World at the time material to this litigation had about 20,000
residents, its own system of roads and streets, its own security force,
its own parks, its own recreation facilities, and a hybrid form of
self-government which dealt with matters of internal maintenance,
security, and operation of the 8 square miles of the project.
FN 11.
Again, we observe that a substantial number of the residents of Leisure
World are not even members of Golden Rain, and so the steps taken by
which Golden Rain purported to "subscribe" to the Leisure World News for
all such residents were meaningless in terms of the issue here
presented.
FN 12.
Here it is again appropriate to refer to Golden Rain's letter to
plaintiff advising that it was free to enter to deliver its newspaper to
subscribers. With this the case, we fail to see the relevance of the
strident pleas about rights to privacy and to freedom of association.
FN 13. In re Hoffman (1967) 67 Cal.2d 845, 852-853 [64 Cal.Rptr. 97, 434 P.2d 353].
FN 14.
Here is the appropriate place to observe that we do not regard this
case as one likely to generate a great constitutional upheaval despite
the stentorian tones in which Golden Rain has portentously argued it.
The reason this litigation was commenced and has been so vigorously
defended is money, and it has nothing to do with protecting any private
rights of association. It began because of a fight between two
newspapers over advertising revenues, and just why Golden Rain has taken
sides in the dispute, even to the point of practicing free press
discrimination, eludes us. This is purely and simply a discrimination
case with substantial economic consequences, and not one truly involving
the resolution of the rights of free speech in conflict with the vested
rights of private property.
FN 15. The following is a full text of the court's remarks made at the time of the December 5, 1977, ruling:
"There remains the one question of the motion to exclude from the jury
references to Plaintiff's claim of violation of or infringement of the
rights, that is, the alleged constitutional rights of free press. And
the motion is to exclude reference to that in voir dire, opening
statements, evidence, argument or other proceedings before the jury ....
"All right. The motion is granted.
"Now, let me elaborate on that. The motion to exclude from the jury
references to the Plaintiff's claim of the violation of [its]
constitutional rights is granted.
"If such a violation occurred, it does not give the right to damages in
the Plaintiff. There are insufficient allegations in the Complaint to
bring the Plaintiff's claim under the provisions of the Federal Civil
Rights Act, the 1983 sections, and that is, the provision under Federal
law that would have to be-- with which we would have to be concerned if
the Plaintiff were asserting a right to damages because of the claim of
the violation of the right to a free press by virtue of the fact that
they were precluded from delivery within the gates of Leisure World
Laguna Hills.
"The Complaint does not allege facts that would show any conduct under
color of State law or statute or ordinance or custom, as is required by
that act. It would appear that the initial conduct that is alleged did
occur beyond the date that the statute would permit an action for
recovery, that is, sometime in 1967, and the Complaint was filed in
1973. The question of whether or not the Defendants should be restrained
from excluding Plaintiff from the grounds of Leisure World Laguna Hills
is before the court and is properly a question for the court to decide,
that is, should an injunction issue? And I anticipate that when the
matter is submitted to the jury on the Cartwright assertions, that is,
the assertions under the Cartwright Act, and the assertions under the
Unfair Trade Practices Act, if there is other evidence that any party
wants to present to the court on the issue of whether or not the
injunction should issue after the jury has the case, you may present any
additional evidence that has to do with the item of the injunction.
"The question under the State Constitution, that is, assuming there is
an assertion of a violation of constitutional rights, should there be a
right to recover damages in a State court because the allegations are
that it violates the State Constitution. When there is an assertion of
an inverse condemnation by the State, clearly, there is a right to
recover damages because that is compensation for the taking of property.
But in those instances where there is an assertion of violation of free
press or free speech, there is no State statute on that subject. There
is a State statute that gives the right to damages on a violation of the
civil rights, and that is the Unruh Act. The legislature saw fit to
enact the Unruh Act and give the right to damages for a violation of
civil rights, but I don't believe the California Constitution is
self-executing in other circumstances.
"So, we will proceed to trial on the Plaintiff's claim for damages under
the Unfair Trade Practices Act, and under the allegations of violations
of the Cartwright Act, and on the Cross-Complaint where the
Cross-Complainant is asserting, at least, some acts that they contend
are also a violation of the Unfair Trade Practices Act and the
Cartwright Act."
FN 16.
Plaintiff's brief argues its right to money damages in terms of whether
the state Constitution is "self-executing." This approach begs the
question. We have already deemed it to be "self-executing" to the extent
that injunctive relief is available without the need for enabling
legislation.
FN 1.
My reluctance is based on my agreement with the majority (see majority
opn., ante, pp. 847-848, fn. 14) that this case really involves nothing
more than a commercial dispute between two entities engaged in the
newspaper business and my regret that plaintiff has been successful in
importing into the dispute the revered constitutional right of freedom
of the press. Although I find it difficult to argue with the logic of
the discussion of constitutional issues in the majority opinion, I have
the uneasy feeling that by right this case should not, and in fact does
not, involve the grave constitutional concerns confronted in the
majority opinion.
FN 2.
The language of article I, section 1, of the California Constitution
is: "All people are by nature free and independent and have inalienable
rights. Among these are enjoying and defending life and liberty,
acquiring, possessing, and protecting property, and pursuing and
obtaining safety, happiness, and privacy."