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Lend Lease Trucks, Inc. v. North American Transport Co.

argued as amended: January 9, 1990.

GANNETT SATELLITE INFORMATION NETWORK, INC., D/B/A USA TODAY, APPELLANT
v.
STEPHEN BERGER, AS EXECUTIVE DIRECTOR, PORT AUTHORITY OF NEW YORK AND NEW JERSEY; ROBERT J. AARONSON, AS DIRECTOR, AVIATION DEPARTMENT, PORT AUTHORITY OF NEW YORK AND NEW JERSEY; MORRIS SLOANE, AS DIRECTOR OF AVIATION OPERATIONS, PORT AUTHORITY OF NEW YORK AND NEW JERSEY; VINCENT BONAVENTURA, AS GENERAL MANAGER OF NEW JERSEY AIRPORTS; W & J LASSITER, INC.; AMERICAN AIRLINES, INC.; NORTHWEST AIRLINES, INC.; PIEDMONT AVIATION, INC.; TRANS WORLD AIRLINES, INC.; UNITED AIRLINES, INC.; DELTA AIRLINES, INC.; EASTERN AIRLINES, INC.; NEW YORK AIRLINES, INC.; AND CONTINENTAL AIRLINES, INC., APPELLEES



On Appeal from the United States District Court for the District of New Jersey, D.C. Civil No. 87-04495.

Gibbons, Chief Judge, Scirica, Circuit Judge, and Waldman, District Judge.*fn*

Author: Gibbons

Opinion OF THE COURT

GIBBONS, Chief Judge.

Gannett Satellite Information Network, Inc. ("Gannett") appeals from a judgment of the District Court of New Jersey dismissing its claims against several officials working for the Port Authority of New York and New Jersey ("Port Authority") and against various airline companies doing business out of Newark International Airport. In this suit, Gannett mounts a first amendment challenge against Port Authority regulations which prohibit Gannett from selling its newspaper, USA Today, at Newark Airport, except through concessionaires. At trial, Gannett argued that these regulations were unconstitutional on their face and as applied. After a lengthy hearing, the district court rejected both claims. This appeal followed. We will affirm in part and reverse in part.

I.

The Port Authority of New York and New Jersey*fn1 is a bi-state public agency responsible, among other things, for operating Newark International Airport, one of the nation's busiest transportation facilities. In performing this function, one of the Port Authority's duties is to allocate the space in the Airport's three large passenger terminals to airlines and other companies wishing to do business at the Airport. Airline companies seeking access to terminal space in Newark Airport must sign long-term leases with the Port Authority, which entitle them to use designated areas in the Airport's terminals, such as airline gates, ticket counters, baggage claim docks, and the like. The Port Authority generally leaves these airline companies free to use their space as they please. However, the airlines are required to obey and enforce the Airport's "Rules and Regulations," a series of rules promulgated by the Port Authority which place certain restrictions on how terminal space may be used.

The Port Authority also secures incidental services for the traveling public by leasing terminal space to privately-owned businesses. To this end, the Port Authority leases a considerable amount of terminal space to private concessionaires who agree to operate gift-shops and newsstands at various locations throughout the Airport's three terminals. Among the merchandise sold at these many gift shops and news stands is written material of all sorts, including books, periodicals, and newspapers. Unlike the airline companies, however, the concessionaires are exempted from a number of the Port Authority's Rules and Regulations within the space in which they operate their businesses.

The dispute in this case arose in October of 1987, when the Port Authority denied Gannett's request to install USA Today vending machines throughout Newark Airport. At that time, the Port Authority's Rules and Regulations prohibited any commercial activity, and particularly the distribution of printed or written material without prior consent from the Port Authority. Appendix, at 495. Noting that "the distribution of USA Today is presently adequately served by the newsstands at . . . Newark International," the Port Authority concluded that it would not serve the interests of the Airport to allow Gannett to install vending machines in the Airport's terminals. Appendix, at 495.

Gannett encountered further difficulties in November of 1987 when one of the principal concessionaires at Newark Airport, W & J Lassiter, Inc. ("Lassiter"), threatened to discontinue the sale of USA Today at its newsstands. Lassiter apparently threatened to take this action to retaliate against Gannett's practice of delivering more copies of its newspaper to Lassiter's newsstands than could be sold in a given day. See Appendix, at 496-97.

Threatened with the total loss of Newark Airport as a market for USA Today, Gannett filed suit on November 12, 1987, naming Lassiter, the Port Authority, and several Port Authority officials as defendants. See Appendix at 53.*fn2 Four months after Gannett filed suit, the Port Authority amended its Rules and Regulations, substituting the following three provisions:

[Rule 2] No person shall carry on any commercial activity at any air terminal without the consent of the Port Authority.

[Rule 3] No vending machines for the sale of goods shall be permitted in the public areas of . . . Newark International which are not occupied by a lessee, licensee or permittee. This provision shall not apply to vending machines in restrooms selling personal hygiene items.

[Rule 10] No person shall post, distribute or display at an air terminal a sign, advertisement, circular, or any printed or written matter concerning or referring to commercial activity, except pursuant to a written agreement with the Port Authority specifying the time, place and manner of, and fee or rental for, such activity.

Appendix at 555. At trial, Gannett argued that these provisions -- Rules 2, 3, and 10 -- together with the Port Authority's leasing arrangement with the airport's concessionaire, amounted to a facially invalid regulatory "scheme" that vested governmental officials with the standardless discretion to censor written expression. In addition, Gannett claimed that the Port Authority's decision denying it permission to install ...


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