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Penthouse International v. Eastman Kodak Co.

Decided: December 22, 1980.

PENTHOUSE INTERNATIONAL, LTD., PLAINTIFF,
v.
EASTMAN KODAK COMPANY, DEFENDANT



Lester, J.s.c.

Lester

This case comes before the court on cross-motions for summary judgment. The issue presented is whether a publisher of a magazine for men may require a private entrepreneur, processor of film, to develop and print film which the processor finds offensive, distasteful and, in fact, in violation of its corporate policy.

Defendant maintains that this is a contract case -- one which may be decided on the narrow contract issue. Plaintiff, on the other hand, contends the primary issue is one of censorship; that First Amendment Constitutional rights are involved, along with a possible antitrust violation.*fn1

On the narrow issue presented, I must determine that the contract theory espoused by Kodak is viable -- that Kodak has the right to decide what it will process and what it will turn away, as long as this policy determination is uniformly applied to all.

In mid-1978 Kodak, in the business of processing films submitted to it by the public, undertook a review of its policy concerning sexually explicit films submitted to its film processing laboratories. This policy review was activated by recent developments in obscenity law, beginning with Miller v. California , 413 U.S. 15, 93 S. Ct. 2607, 37 L. Ed. 2d 419 (1973) and its statutory and decisional offspring. Kodak's chief concern then appeared to be the risk of criminal prosecution under applicable State and Federal laws and the damage to its business reputation and good will which would result from the filing of charges under these statutes, whether or not the likelihood of conviction was present.

Kodak then determined, in the exercise of its own independent business judgment, to adopt a policy not to return film submitted to it in a customer order which fell within the " Miller -defined" categories. Once determined, such policy was made an express part of Kodak's Service Manual. The policy statement reads in pertinent part:

"Pictures depicting the following types of conduct will not be returned to customers by Kodak when they are discovered during the work performed in completing a customer order:

2. Masturbation, excretory functions or lewd exhibition of genitals."*fn2

This policy statement, with standards for implementation, was provided to the Service Department's supervisory personnel in Kodak's ten processing laboratories, since they would have primary responsibility for seeing such policy was applied reasonably, objectively and uniformly according to the standards provided, albeit that standard differed from the standards set down in Miller.

On or about July 20, 1979, plaintiff submitted to Kodak's Fair Lawn laboratory an order for processing containing some 2,000 Kodachrome exposures. During the processing, the film was

found by Kodak standards, to depict varying degrees of sexually explicit conduct and/or "lewd exhibition of genitals" and, according to policy directives, these transparencies were delivered to the Service Manager for examination. When judged by the standards he had been instructed to apply, the Service Manager found 285 of the transparencies to fall within the categories of "lewd exhibition of genitals and/or masturbation" as specified in the policy statement,*fn3 whereupon the 285 transparencies were withheld from the Penthouse order. The remainder ...


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