Regan v. Time, Inc.

PETITIONER:Regan
RESPONDENT:Time, Inc.
LOCATION:Dodge Main Plant

DOCKET NO.: 82-729
DECIDED BY: Burger Court (1981-1986)
LOWER COURT:

CITATION: 468 US 641 (1984)
ARGUED: Nov 09, 1983
DECIDED: Jul 03, 1984

ADVOCATES:
Elliott Schulder – on behalf of the Appellants
Stuart M Gold – on behalf of the appellee
Stuart W. Gold – for appellee
Stuart M. Goll – on behalf of the Appellee

Facts of the case

Question

Audio Transcription for Oral Argument – November 09, 1983 in Regan v. Time, Inc.

Warren E. Burger:

We will hear arguments next in Donald T. Regan against Time Magazine.

Mr. Schulder, you may proceed whenever you are ready.

Elliott Schulder:

Thank you.

Mr. Chief Justice, and may it please the Court, the basic question in this case is whether a statute that prohibits a publisher from printing an illustration of U.S. currency in color rather than in black and white, or in dimensions approximating the size of genuine currency, violates the First Amendment protection of freedom of speech or of the press.

There are two statutes at issue in this case, and they must be viewed in tandem.

The first one, 18 USC 474, Paragraph 6, prohibits the printing, photographing, or otherwise making or executing any engraving, photograph, print, or impression in the likeness of any obligation or security of the United States.

The term

“obligation or security of the United States. “

is also defined by statute in 18 USC 8, which we have reproduced on Page 5 of our brief, Footnote 2.

The second statute involved in this case is 18 USC 504.1.

That statute creates an exception to the ban in Section 474.

Section 504 permits the printing or publishing of illustrations of U. S. securities and obligations for philatelic, numismatic, educational, historical, or newsworthy purposes in articles, books, journals, newspapers, or albums, provided that three conditions are met.

First, the illustrations must be in black and white.

Second, the illustrations must be either over or undersized.

In other words, they must be at least one and a half times the size or less than three-quarters the size of actual currency.

And three, the materials, the negatives and the plates used in the making of these illustrations, must be destroyed after their final use.

This case began when appellee Time, Incorporated, brought suit for declaratory and injunctive relief in the United States District Court for the Southern District of New York.

Time claimed that the statutory scheme amounted to government censorship of the press, and effected a massive infringement of the First Amendment rights of Time’s editors and publishers.

The basis for the lawsuit was that over approximately a ten-year period Secret Service agents had brought to the attention of Time’s management the fact that a number of illustrations of currency in Time’s magazines violated the color and size requirements of the statutory scheme.

The district court entered summary judgment for Time and held Sections 474, Paragraph 6, and 504.1 unconstitutional on their face and as applied to Time.

The district court concluded that Section 474, Paragraph 6, was overbroad because it prohibits all reproductions of currency without regard to whether the reproduction has a capacity to deceive.

Turning to Section 504.1, the court focused on the purpose and forum provisions of the statute, and held that the statute is an impermissible regulation of the manner of depicting currency because, first of all, it is a content based statute that requires an inquiry into whether an illustration is undertaken or produced for one of the purposes specified in the statute, and two, the court concluded that there was no nexus between the statutory goal of preventing counterfeiting and the newsworthiness or educational value of an illustration or the type of forum in which the illustration appears.

The court also held Section 504 void for vagueness, because it concluded that it is difficult to determine what is a philatelic, numismatic, educational, historical, or newsworthy purpose, and what is a journal, newspaper, or album.

The government’s basic submission in this case is that the statutory scheme at issue here serves what is a concededly compelling governmental interest in a manner that does not impose a substantial burden on First Amendment rights, and that leaves open ample alternative channels of communication.

First of all, the interest, government interest in this case is that of protecting against counterfeiting.

This is an interest that has a specific constitutional authority.

Congress enacted a counterfeiting statute, the first Congress enacted a counterfeiting statute in reliance upon the explicit authority of the Constitution to coin money and protect against counterfeiting.

Time recognizes in this case that it is essential to its facial challenge to attempt to portray the case as involving a substantial infringement of First Amendment interests, but Time has grossly overstated the impact of the statutory scheme.

Time’s brief contains numerous examples of hyperbolic rhetoric.

For example, Time states that the law purports to control the editorial content of Time’s magazines, and that the statute prohibits, prevents, or suppresses the use of the symbol of money.

William J. Brennan, Jr.:

Mr. Schulder, may I ask–

Elliott Schulder:

Certainly.

William J. Brennan, Jr.:

–are these the three illustrations that are involved in this case, Page 37?

Elliott Schulder:

The illustrations begin on Page 13 of the Joint Appendix, Your Honor.

William J. Brennan, Jr.:

But the ones actually at issue here are the–

Elliott Schulder:

No, the ones actually at issue here are 13 through–

William J. Brennan, Jr.:

–Thank you.

Elliott Schulder:

–23.

William J. Brennan, Jr.:

Thank you.

Elliott Schulder:

The problem with Time’s exaggerated portrayal of its First Amendment interest in this case is that Time’s editors and publishers in fact may use pictures of currency symbolically.

The statutory scheme does not prohibit such use.

The statutes merely impose reasonable restrictions on the manner in which a person may print or photograph U.S. currency.

Thus, Time’s argument really is that it has a substantial First Amendment in publishing pictures of currency in color, or in a size approximating the size of actual currency.

It is our contention that this position trivializes the First Amendment.

While Time may have legitimate reasons for printing color pictures of currency or pictures that approximate the size of genuine currency, we submit that it demeans the Constitution to say that there is a substantial First Amendment interest to publish pictures of currency in color rather than in black and white.

Sandra Day O’Connor:

Mr. Schulder, I guess there is more involved here than simply the size and color limitation, though.

If you look at Section 504, you still have the restrictions on the purpose of the publication, do you not, to contend with?

And the government in its brief has apparently conceded that at least some aspects of that might be invalid, and it is suggested we should narrow the construction of the statute or something.

Elliott Schulder:

Well, we would–

Sandra Day O’Connor:

I would be very interested in hearing you focus on that and tell us exactly, how you would suggest the Court narrow the statute precisely.

Elliott Schulder:

–Certainly.

First of all, Your Honor, I would like to point out that in none of the instances that are involved in this case did the Secret Service agents question in any way whether Time, any of Time’s publications were journals, newspapers, articles, or books, or in any way suggested that the use of the pictures here was not for a newsworthy or other purpose covered in the statute.

Sandra Day O’Connor:

Well, I suppose there is an overbreadth challenge that we have to deal with?

Elliott Schulder:

That’s correct.

Sandra Day O’Connor:

So we need to talk about it, do we not?

Elliott Schulder:

Certainly.

Focusing on the statute itself, and in order to understand the statute, it is also important to understand the legislative history behind it.

The statute, as you can see, on Pages 2 and 3 of the government’s opening brief, provides that certain pictures of currency are permitted for a list of enumerated purposes in a list of enumerated forums, but not for advertising purposes, et cetera, et cetera.

And then the statute sets out the specific conditions under which these illustrations may be published or printed.

Now, it is our… if you look at the legislative history, it seems clear that what Congress was getting at here was, Congress was attempting to carve out an exception to the broad prohibition on the use of currency for expressive purposes that was established in Section 474.

Elliott Schulder:

Congress was aware of the fact that over the years the Secretary of the Treasury had created administrative exceptions to the broad ban in 474, and in fact had permitted the use of illustrations of currency for certain of these purposes.

Congress essentially codified this administrative practice in the statute, but we submit that Congress did not intend in enacting this statute to require Secret Service agents to pore over every single publication that might contain an illustration of currency in order to determine whether–

Sandra Day O’Connor:

Well, For example, you agree, don’t you, that it is very difficult to support the requirement that it be determined whether something is newsworthy.

Elliott Schulder:

–That’s correct.

Sandra Day O’Connor:

Okay.

So what I want to know is specifically what it is you are suggesting this Court do with this statute.

Elliott Schulder:

Okay.

We suggest that the Court look at the statute and look at the legislative history.

Both the Senate and House reports, which are identical in their language–

Sandra Day O’Connor:

You are telling me why we should do something, or background, but why don’t you tell us what it is you think we should do specifically?

What–

Elliott Schulder:

–We suggest–

Sandra Day O’Connor:

–How should it be interpreted?

What narrowly?

Elliott Schulder:

–We suggest that the Court construe the statute narrowly, so that the statute would permit the printing of illustrations of obligations or securities of the United States in publications so long as those illustrations comply with the three conditions set out in the statute.

Sandra Day O’Connor:

Any kind of publication for any purpose.

Elliott Schulder:

That’s correct.

We believe that the purposes and forums that are provided in the statute are basically illustrative.

Congress did not intend to establish a narrow list of requirements that a publication had to meet in order to be able to print illustrations of currency.

Sandra Day O’Connor:

At one point you suggested that we might strike down that section altogether and leave only 474 in place.

Elliott Schulder:

Well, we didn’t suggest that, Your Honor.

We suggest that the two statutes be read together.

However, if the Court decides that under our narrowing construction there still is a problem with Section 504 in terms of the lines that are drawn, I will try to explain why the lines that are drawn in this statute are valid, but if the Court still finds a problem with the statute, then we submit that Section 474 should still remain as a restriction on the printing of U. S. currency.

Warren E. Burger:

Aren’t we always in a sensitive area when you have a statute authorizing some government official to decide what is or what is not newsworthy?

Elliott Schulder:

That’s correct, Your Honor, and that is why we have proposed this narrowing construction of the statute, which we feel is fully consistent with Congress’s intent–

Warren E. Burger:

Well, how do you narrow that construction?

Elliott Schulder:

–Excuse me?

Warren E. Burger:

How do you narrow the phrase in the exception,

“newsworthy purposes, including newspapers, journals, articles? “

Elliott Schulder:

Well, the way we have suggested that it be construed is that these various purposes and forums be looked at as illustrative.

Elliott Schulder:

In other words, Congress was setting out groups of illustrations of the types of forums and purposes that were permissible.

The only purpose here that is mentioned as being impermissible is advertising purposes, but we would submit that this list of purposes and forums was simply illustrative, and that Congress did not intend to have Secret Service agents decide in enforcing the statute whether–

Byron R. White:

Mr. Schulder, even if we didn’t agree, even if we said that we couldn’t agree with you based on the legislative history, and certainly not the language of the statute, that that is what Congress intended.

Since this is a federal statute and a federal court, we could just get rid of the overbreadth and declare that illegal.

We wouldn’t have to make it a statutory construction problem.

We could say it is… we just clip off the overbreadth.

Elliott Schulder:

–I believe that’s correct, Your Honor.

Byron R. White:

We have done it before.

So whether it is construing it narrowly or not, you would concede that there is part of the statute that must be dispensed with somehow.

Elliott Schulder:

That’s correct.

John Paul Stevens:

May I inquire?

The three things you want to retain are the size limitation, the black and white versus color, and the destruction after use.

As long as those three things are met, that is all you ask us to save?

Elliott Schulder:

Well, also the requirement that the illustration be included in a publication of some sort.

John Paul Stevens:

I see.

In other words, that’s what the… illustrative of all publications.

Elliott Schulder:

That’s correct.

John Paul Stevens:

And it could be for any kind of story, not just about the item.

Elliott Schulder:

That’s correct.

We submit that the statutory scheme is an example of reasonable line drawing here.

It is very similar, we submit, to valid statutes that regulate the size and placement of outdoor advertising signs or the decibel level of loudspeakers or the hours in which loudspeakers can be used, or the time and place for parades.

Clearly, there is a nexus here between the color and size requirements and the statutory goal of protecting against counterfeiting.

Congress specifically relied on the advice of the Department of Treasury in fashioning these provisions of the statute here.

Sandra Day O’Connor:

Mr. Schulder, what did the illustrations in the appendix failed to comply with other than color?

Elliott Schulder:

Certain illustrations failed to comply with the size provisions of the statute, Your Honor.

Now, it certainly is possible to think of examples where the statute might proscribe protected conduct, but we submit that that could probably be done with almost any statute.

Our submission here is that Congress meant to address what is a real problem in enacting this statute.

William J. Brennan, Jr.:

Mr. Schulder, may I ask, does this… do either of these statutes reach one of these things on a television screen?

Elliott Schulder:

No, the statute does not… 504, Subsection 2, specifically excludes any prohibition on motion picture films, microfilms, or slides that are used for–

William J. Brennan, Jr.:

So what Time did here could be done on a television screen or in a motion picture?

Elliott Schulder:

–That’s correct.

William J. Brennan, Jr.:

But not in a journal or magazine.

Is that right?

Elliott Schulder:

And the reason for that is that the Treasury Department advised Congress that motion pictures or TV use could not be used for counterfeiting purposes, but there is a restriction in the statute that all of the materials that are used to prepare motion pictures or these other uses be destroyed after their use.

Now, the problem–

Byron R. White:

What is the purpose of the size limitation?

Just to make sure that no one would mistake it for the actual thing?

Elliott Schulder:

–That’s correct, Your Honor.

Byron R. White:

Well, it would seem to me that something in color, if it were large enough or small enough, no one would ever mistake it for the real thing.

Elliott Schulder:

Well, the problem–

Byron R. White:

I mean, it doesn’t make any difference how large or small it is.

If it is in color, it violates the statute.

Elliott Schulder:

–That’s correct.

Now, let me explain that the statute… there are basically two problems that the statute is directed at.

One is the finished product, and both the color and size limitations would go to that, because a full color, full size reproduction certainly could be passed as–

Byron R. White:

Sure, but–

Elliott Schulder:

–Now, even in the case of a color reproduction that is overblown or blown up, the main problem there is in the process of producing it.

The four color process of producing a color print is–

Byron R. White:

–So the United States submits that it is dangerous to the currency to publish an oversized or undersized–

Elliott Schulder:

–Color illustration.

Byron R. White:

–photograph if it is in color.

Elliott Schulder:

That’s correct.

Byron R. White:

Even if anybody would know automatically, just at a glance, that that is not the real thing.

Elliott Schulder:

That’s correct, because the process that is used to create that photograph is identical to the process that is used by a vast majority of counterfeiters.

Byron R. White:

I know, but if it is the process, if it is the process, what do you care about the results of the process being circulated?

It is the process, and that doesn’t go on on the magazine.

That goes on when you print it or photograph it, and you are requiring that all this machinery or whatever, the plates or whatever you call them are to be destroyed.

Elliott Schulder:

Well, but by limiting the use of… by restricting or prohibiting the making of color photographs, the statute narrows the universe of publishers who are going to have materials that are capable of printing currency in color.

It will give the Secret Service and law enforcement agencies a smaller universe of people to have to deal with in investigating and detecting counterfeiting.

Byron R. White:

I see.

Elliott Schulder:

Now–

John Paul Stevens:

I must confess, I don’t really follow that.

I thought any photo offset printer, any qualified printer could actually do this.

You don’t have to be taking pictures of dollar bills in order to have the capacity to take pictures of dollar bills, do you, if you can take pictures of other things that have the same general characteristics.

Elliott Schulder:

–I’m not sure I understand.

John Paul Stevens:

Well, as I understand it, you are suggesting that in order to have the expertise, in order to take pictures of money, you have to actually take pictures of money.

You can’t get the expertise by–

Elliott Schulder:

Oh, no.

Oh, no, no.

John Paul Stevens:

–your general ability as a photo offsetter.

Elliott Schulder:

No.

That’s not what I was suggesting at all.

I was suggesting that the statute is narrowing the universe of people who are going to have possession–

Byron R. White:

Well, it really isn’t.

You don’t… This law wouldn’t prevent Time Magazine from publishing a color photograph of a pound note.

Elliott Schulder:

–Well, there may be another statute that prohibits–

Byron R. White:

Well, I know, but–

Elliott Schulder:

–publication of foreign currency.

Byron R. White:

–but I can’t believe, like Justice Stevens, that your just prohibiting photographing, publishing photographs of currency in color would make any dent in the process, because there would be hundreds of other things that they would be using the same process–

Elliott Schulder:

It is not a question of making a dent in the process.

It is a question of narrowing the number of publishers, or eliminating the possibility that publishers will have a legitimate basis or a legitimate excuse for having possession of negatives, the four-color negatives of currency.

Thurgood Marshall:

–Then wouldn’t you have to get rid of all photo offset people?

Elliott Schulder:

No, you would just have to… no, the problem is not with the photo offset–

Thurgood Marshall:

Isn’t that the only way you could be sure?

Elliott Schulder:

–The photo offset process is not the problem.

It is simply–

Thurgood Marshall:

What is the problem?

Elliott Schulder:

–The problem is the potential use of that process to create color negatives of currency, which is precisely the same method that counterfeiters use to produce counterfeit currency.

John Paul Stevens:

Yes, but, Mr. Schulder, if I may, they argue their best case is the particular things in the record, so we perhaps don’t even need hypothetical examples.

Take this example of the cover where a man is holding a bunch of bills in his hand, the one on the… holding your pocketbook.

John Paul Stevens:

What possible use could the plates for that picture be to a counterfeiter?

I mean, if you made a million pictures of that, you could never pass that.

Elliott Schulder:

No, the plate of that particular photograph would not necessarily be of use to a counterfeiter, although–

John Paul Stevens:

Is there any government interest, legitimate government interest in preventing this particular picture?

Elliott Schulder:

–I would submit that there is, there is, that actually the final product here on Page 19 of the Joint Appendix does pose a possible counterfeiting problem, and I would also refer the Court–

John Paul Stevens:

Well, what is the problem?

Elliott Schulder:

–Well, I would like to refer the Court to the preceding page also, Page 17.

The problem is that–

John Paul Stevens:

I see it on 17.

You’ve got a flat bill.

I see that.

Elliott Schulder:

–Okay.

But one of the… one of the most common methods of counterfeiting currency is to cut the corners of a higher denomination bill and paste those onto a lower denomination bill.

I have seen examples where someone, counterfeiters have taken one dollar bills and have left the picture of George Washington and one dollar on the currency, and simply pasted twenties or tens in the corners, and those have been passed, believe it or not.

0 [Generallaughter.]

Thurgood Marshall:

I see.

Well, how would this hurt or help that?

Elliott Schulder:

Well, it would seem to me that someone–

Thurgood Marshall:

How would this hurt or help that?

Elliott Schulder:

–This would prevent someone from being able to cut out the number ten–

Thurgood Marshall:

Well, instead of cutting out this, why not cut a dollar bill, which is rather available?

Elliott Schulder:

–No, the problem isn’t cutting a dollar bill.

The problem is cutting a ten dollar bill.

Thurgood Marshall:

They are pretty available now.

Elliott Schulder:

But no one is going to–

Thurgood Marshall:

I even have one.

0 [Generallaughter.]

Elliott Schulder:

–No one is going to destroy a ten dollar bill in order to pass counterfeit.

What they want–

Thurgood Marshall:

I thought you said they did.

Thurgood Marshall:

I thought you said they cut one bill and put the other one on.

Elliott Schulder:

–Well, they cut an illustration of a bill.

Thurgood Marshall:

All this does is, it saves the counterfeiter ten bucks?

Elliott Schulder:

That’s correct.

Thurgood Marshall:

It hasn’t run them out of business.

Well, now, let me be sure I understand.

You point is that even on this one, they could cut the corner out of the magazine cover and paste that corner, which would cost them less than ten dollars–

Elliott Schulder:

Certainly.

John Paul Stevens:

–onto a one dollar bill.

Elliott Schulder:

Certainly.

John Paul Stevens:

I understand.

Elliott Schulder:

And I think the example is even more graphically illustrated in the one on Page 17, where the size is almost identical to the size of real currency, and you are dealing here with a thousand dollar bill, which are rarer… they are not really in circulation, general circulation.

Byron R. White:

If these had been oversized, or sufficiently oversized or sufficiently undersized, it still would violate the law if it were in color.

Elliott Schulder:

If it were in color.

That’s correct.

That’s because of the problem–

Byron R. White:

That is still not at all… I’m not sure I understand your color–

Elliott Schulder:

–Well, the problem is… the problem that Congress was trying to get at was to eliminate the possibility that there would be multiple plates and negatives of currency.

Those are the same negatives and plates that counterfeiters use, and–

Byron R. White:

–We just couldn’t rely on them to destroy them, I take it.

Is that the problem?

Elliott Schulder:

–That’s correct.

Byron R. White:

Is that the worry?

Elliott Schulder:

That’s correct.

Byron R. White:

So it isn’t the process, it is the fact that there are plates and negatives that they would be using.

Elliott Schulder:

That’s right.

Byron R. White:

Because if they are taking a picture of an actual bill, what would they do?

Would they… would the plate be the same size?

I would think they would just take a picture and it would come out either large or small.

Elliott Schulder:

Well, the plate could be different sizes.

Elliott Schulder:

I mean–

Byron R. White:

Well, I know, but if it were sufficiently large, no counterfeiter could use it.

Elliott Schulder:

–That may be.

Byron R. White:

Well, still, then, I don’t understand the–

Elliott Schulder:

Well–

Byron R. White:

–First you say it is the process, which doesn’t make a whole lot of sense.

Now you say it’s the plate, the negative.

Elliott Schulder:

–Well, by the process, I mean the materials that are used in the process of producing the final product.

Warren E. Burger:

Are you using plate in the sense that the plate is the process, part of the process?

Elliott Schulder:

That’s correct.

Byron R. White:

Well, do you think at some point in reproducing a color photograph there is some plate that is exactly the same… a negative that is exactly the same size as a–

Elliott Schulder:

Yes.

As I think I have made clear, it is difficult to draw precise lines in this area.

There are situations, as I pointed out, where there are clearly problems in permitting reproduction of pictures of currency, and there is a continuum between those cases, the case of the full color, full size illustration and other cases that move away from that.

But the alternatives that might be available, we submit, would create problems of their own.

They would be difficult to administer.

They would leave broad discretion in the hands of law enforcement officers, and would create the possibility that the law enforcement officers would enforce the law on the basis of the content of the communication.

We would submit, finally, that the First Amendment interest in publishing color rather than black and white pictures of currency is quite minimal.

The color and size limitations of the statute serve the concededly compelling governmental interest in protecting against counterfeiting, and that the statute leaves open ample alternative means of communication, such as black and white illustrations that comply with the size requirements.

Accordingly, we submit that the judgment of the district court should be reversed.

I would like to reserve the remainder of my time for rebuttal.

Warren E. Burger:

Very well.

Mr. Gold, you may proceed whenever you are ready.

Stuart M Gold:

Mr. Chief Justice, and may it please the Court, the central issue in this case is the right of Time or anyone to make or publish pictures that pose no substantial risk to any legitimate government concern.

I think the case is reducible when I think of it to basically three words, three or four words on the one hand.

That is, pictures, where I thought this case was about when we brought it, and color plates and negatives, which is where the government has taken it, although today for the first time I get the feeling we are going back to the pictures, what the case was originally about, because we are now told that people will clip the edge of the Lockheed cover, paste it, that thousand dollar, that thousand figure, on a one dollar bill and be able to pass it.

Byron R. White:

But you have heard this before?

Stuart M Gold:

I have heard that that happens?

Byron R. White:

Earlier in this case?

Stuart M Gold:

No, earlier in this case I have never heard it before.

Stuart M Gold:

As a matter of fact, the government never submitted any facts.

Byron R. White:

How was it just a picture case to begin with–

Stuart M Gold:

We brought this case because the statute as written and indeed as interpreted by the government prevents us from printing this picture of George Washington, and our basic thesis was that there is no danger in this picture to the currency and there is no danger in the plate that was used to make this picture.

The plate used to make this picture has all the distortions that are on this.

It also prevented us from presenting… it didn’t prevent us, but the government–

Byron R. White:

–Is there a distortion there except the size?

Stuart M Gold:

–There is a distortion there in the–

Byron R. White:

No, on the George Washington.

Stuart M Gold:

–Yes, there is distortions in the overlays, just as in the Lockheed cover, which was a thousand dollar bill, you have overlays.

Thurgood Marshall:

Yes, sir, I was wondering which… when you cut off the thousand dollar figure and paste it on a one dollar bill, what do you do with Washington’s picture?

Stuart M Gold:

Well, you probably–

Thurgood Marshall:

I mean, he was talking about that.

Stuart M Gold:

–I don’t know, and I submit that when you pass a thousand dollar bill, while perhaps people don’t look very closely when they get handed a one dollar bill, although–

Thurgood Marshall:

You can starve to death when a thousand dollar bill is going to give you cash.

0 [Generallaughter.]

Stuart M Gold:

–I do not think that that is a significant danger.

So this really was a picture case in the sense that we brought it because we think we should be able to make pictures just like Gail Wagner should be able to make his three-foot thirty dollar bill with Nixon’s picture in it.

That, too–

Harry A. Blackmun:

Wasn’t Wagner a woman?

Stuart M Gold:

–Excuse me?

Harry A. Blackmun:

Wasn’t Wagner a woman?

Stuart M Gold:

Yes, sir.

I apologize.

To allow Gail Wagner to make her representation.

When the government… which raises another point.

Harry A. Blackmun:

It happens to be an Eight Circuit case.

That’s why I know.

While you are stopped there, what picture appears on a thousand dollar bill, whose picture?

0 [Generallaughter.]

Stuart M Gold:

That’s a good question.

Harry A. Blackmun:

I think it is Mr. Cleveland, isn’t it?

Stuart M Gold:

Grover Cleveland.

Yes, it is, Your Honor.

Warren E. Burger:

But I suppose perhaps the suggestion is that so few people, including some present here, are familiar with thousand dollar bills that a person could be deceived.

Is that part of the government’s claim?

Stuart M Gold:

Well, if that is part of the government’s claim, the one thing I would know is that if I was handed a thousand dollar bill with Washington, Jackson, Hamilton, Franklin, or Grant on it, I would be very suspicious.

The government also… another point that was made today was this notion that we are now gravitating towards a case that only involves really color and size.

I just want to remind the Court that as written and as enforced before this case was brought, the purpose, the purpose element was enforced against us.

In fact–

Sandra Day O’Connor:

Well, what if it were narrowed, as the government is arguing, so that all that is left is a color and size limitation?

Stuart M Gold:

–And I believe the government is now also still claiming that there would be a publication limitation, which we might be covered in in terms of an exemption, but it raises several problems for both Gail Wagner and people who might want to tear out the cover of Time Magazine and place it on their wall.

Does it become contraband then?

But putting that to one side, addressing the color and the size, which seem to be the major concerns here, the problem with the color restriction is twofold.

One is, the government says it is trivial, our interest in printing in color is trivial.

I don’t know why they picked the word “trivial” unless perhaps it is something lower than what Shad says, which is, anything that puts even an incidental burden has to be looked at and examined, but again, putting that to one side, as to why they used “trivial”, it is not trivial.

There is, A, a marketing reason why color is important to us.

We don’t do it.

It is very expensive.

We do it because we think we have to in order to get people to buy our magazine.

It is very important.

This picture in black and white would not be, I submit, as effective as it is in color.

So it is not a trivial interest, one, in terms of the market power, that we must print in color to compete, and to attract readers to our message, and two, color has tremendous impact.

William H. Rehnquist:

Well, but you can put on a thousand other covers in color without putting this one on.

Stuart M Gold:

Excuse me?

William H. Rehnquist:

I say, you can… if you want a colored cover, you can pick a thousand other subjects to do with money without printing a picture of George Washington–

Stuart M Gold:

That is true, but I did not think that unless the government can demonstrate in the first instance that there is a substantial interest as being furthered of theirs that they have the right to tell me, go write and illustrate some other story, or put your story about the economy, but don’t use this symbol.

William H. Rehnquist:

–They say that the interest that is being furthered is the danger of helping counterfeiters.

Stuart M Gold:

But there is no danger.

William H. Rehnquist:

Well, if the Congress has said that, why should you or I try to second guess that?

Stuart M Gold:

Because Congress, when they are passing laws that restrict speech, are supposed to make an effort to draw lines that are reasonable.

Stuart M Gold:

There are reasonable lines here.

In order to prevent what I think the government is really getting at… And there is a footnote in their brief about a magazine that published a full color actual size hundred dollar bill.

If that is what the danger is, and I can conceive that there is a danger of that, then let’s have the government regulate that, prevent that.

You don’t have to prevent all color representations in order to pass a statute that will stop someone from making a full size, actual size, actual color representation of a hundred dollar bill or any dollar bill.

John Paul Stevens:

May I ask you, would you have any objection if the statute merely had the size limit in it?

Stuart M Gold:

Only had the size limit?

John Paul Stevens:

It would be perfectly all right, I gather, under your argument.

Stuart M Gold:

I have got a couple of problems.

The size… the statute doesn’t let you publish any part of the bill.

Now, size may again become–

John Paul Stevens:

Assuming that the size applies to parts as well.

Stuart M Gold:

–Okay.

I would say that if the statute were struck and Congress in its considered judgment, after fully vented the First Amendment interest and the government’s interest, drew the line in terms of just the size, you cannot print in the actual size, or if they drew the line as the Treasury Department submitted, one and a half times as large or less than three quarters, if after their considered judgment that was the statute that came out, this would be a very different case.

John Paul Stevens:

But you could still come in and say, but we really can’t make quite as dramatic a symbol unless we have an exact size dollar bill on the cover–

Stuart M Gold:

But if the government were to demonstrate that there was a serious danger for bills that were one and a quarter the time… times the size of the actual thing, and Congress then passed the line there, our case would be very weak, I submit.

But here we haven’t had that.

Here we have had a statute that… 474, Paragraph 6, was not considered very much when it was passed; 504 was considered but basically on the submission of the Treasury Department.

No one ever raised a First Amendment concern.

John Paul Stevens:

–Well, what if we held it unconstitutional, Congress had a committee meeting, and they studied it at great length, say, we have thought about this, and we think the statute we used to have was absolutely necessary, and they wrote a lot of findings saying that it is kind of remote, but we think there is a danger that people might copy it if we don’t, so they re-enacted precisely the same statute after lots of hearings and lots of legislative history.

Would it be valid?

Stuart M Gold:

I don’t think so, because I don’t think that there would be any legislative history that could show that you need to prevent these kinds of pictures or these kinds of plates, even, to control what you are trying to stop, the impact on counterfeiting.

Sandra Day O’Connor:

Do you think the fact that there is a specific provision in the Constitution permitting Congress to enact legislation in this area gives it more significance, the power of Congress?

Stuart M Gold:

Not–

Sandra Day O’Connor:

We are not dealing with the necessary and proper clause.

They have specific power in the Constitution.

Stuart M Gold:

–I do not think that that has bearing on whether or not they are passing statutes that in fact further the interest against counterfeiting.

This statute doesn’t… its purpose is to attack counterfeiting, but I am not sure it really addresses the problem.

It really does not.

Sandra Day O’Connor:

I suppose trademark laws impact on the First Amendment rights of your client, don’t they?

Stuart M Gold:

Yes.

Sandra Day O’Connor:

Are they unconstitutional because you can’t print something that has a trademark?

Stuart M Gold:

No, those are not unconstitutional.

However, here, there has been no weighing.

There is a reason why trademarks are protected, just as copyrights are protected, and certainly protecting copyrights, for instance, furthers a purpose in which there has been a decision that First Amendment rights have to give way somewhat.

We are not saying–

Warren E. Burger:

Could the Treasury… Could the Secretary of the Treasury copyright all of his currency symbols?

Stuart M Gold:

–I don’t believe so.

Warren E. Burger:

Why not?

Stuart M Gold:

Let me amend that.

I don’t think he could copyright any and each part of this… of the currency.

Warren E. Burger:

The whole thing.

Stuart M Gold:

The whole thing?

I am not sure whether… I am not sure whether that expression is original enough to qualify as copyright.

However, if he was able to copyright the entire bill, which again I am not sure he could, then I think we would… to a large extent might qualify in using parts of it, and we have never used the entire piece of currency as a fair use.

Warren E. Burger:

Let me pursue one of the other hypotheticals given.

Suppose Congress had made this overwhelming, virtually conclusive legislative history of their belief, their collective belief that this was imperative, these limitations, to protect against counterfeiting.

Would a court then approaching this problem have to weigh that value against the value of the… the values, the First Amendment values, if any are involved, in what a publisher is trying to do, and consider whether there are other ways the publisher can accomplish the same thing without running a foul of the statute?

Stuart M Gold:

Yes, I think, as I said before, that would be a different case, if those findings were made.

However, this case has existed for quite some time now, several years, and I have yet to hear any compelling, compelling justification of the restrictions of this statute in furthering the interest in preventing counterfeiting.

Warren E. Burger:

But you do agree that this is a balancing process, from what you responded.

Stuart M Gold:

That there is some element of balancing in that once the government demonstrates that this is advancing in some way their interest, then maybe our First Amendment rights to some extent have to give way, but there has been no such demonstration.

Warren E. Burger:

Frequently we either modify or strike down a statute because we conclude or other courts conclude that there are less intrusive, less difficult means of accomplishing the same objective.

Would we then weigh whether a publishing house has other means of accomplishing their objective without striking down an Act of Congress?

Stuart M Gold:

Yes, once you are convinced that the government has demonstrated that this is a danger.

Until then, I believe that it is Time as well as other people’s right to make their editorial judgments, their judgments that this picture, which is banned, and that we wanted to publish to demonstrate that a corporation was cash rich, and while its future was uncertain, depending on the decisions it made, the horizons were unlimited, and had to go with a picture that has coins on there to demonstrate that this is a cash rich company.

Lewis F. Powell, Jr.:

Mr. Gold, how would the government go about demonstrating what you said it must demonstrate?

How would it go about it to your satisfaction?

Stuart M Gold:

Well, to demonstrate a need to do what they want to do, I don’t believe they could.

Lewis F. Powell, Jr.:

Do you agree as a starter that the government does have a compelling interest to protect its own currency?

Stuart M Gold:

To protect against counterfeiting?

Stuart M Gold:

Yes, it does.

Lewis F. Powell, Jr.:

Yes.

Stuart M Gold:

It does.

And, Your Honor, if they came in with proof that demonstrated that the making of plates in copies for use as magazine covers were a problem, and then the Congress went on to write a statute that punished you for printing, publishing, possessing a plate or picture in an exact copy of the currency, that probably would withstand the test.

Lewis F. Powell, Jr.:

Have you put your hand to a draft of a statute that you think would meet your views?

Stuart M Gold:

As a matter of fact, I did attempt the first–

Lewis F. Powell, Jr.:

Is it in your brief anywhere?

I don’t recall seeing it.

Stuart M Gold:

–No, it is not.

But I have tried to think of would we be sending this back for Congress to go through the motions and then come back and say there is no way to get at even what the government legitimately wants to get at.

I think they could if they prohibited the making, possessing, selling of a duplicate or exact copy of an obligation of the United States or any plate or negative from which one could be made.

Then I thought there might be a loophole there, that there may be some people who make bad copies, and then will try and do something with them, so that they could have a statute that also prohibits the making, possessing, selling, passing of a likeness of any obligation and perhaps any part thereof with the intent to defraud.

There, you will get somebody who intends to do something bad with it but it just didn’t come close enough.

Lewis F. Powell, Jr.:

When you say, when you use the term “exact likeness”, that is exactly what counterfeiters do.

In other words, no use limiting that.

Criminal law takes care of that.

Stuart M Gold:

Well, but the government, if I understand them, does not want, or one of their big pitches to you has been, we need… we can’t catch people when they are in the act of the counterfeiting.

We have got to stop it a step before.

We want to go into the printing plant, and if these plates are in there, say, we now have the right to assume that these plates may be used for counterfeiting.

Warren E. Burger:

Mr. Gold, you and your friend have both focused on currency.

These statutes deal with more than currency, do they not, government bonds, for example?

What else besides currency?

Stuart M Gold:

Anything that comes within the definition of an obligation.

Warren E. Burger:

Any obligation of the government.

Stuart M Gold:

Yes.

Warren E. Burger:

Now, there are a great many, probably many millions of people in this country who have never seen a government bond, but if they were confronted by something that looked the way they thought a government bond probably looks, there being as many gullible people in this country as we constantly read about, frequently in Time Magazine–

0 [Generallaughter.]

–aren’t they entitled to protection, and isn’t the government entitled to protect those people, laying aside dollar bills?

Stuart M Gold:

Right.

Well, the first thing I would say is, yes, they are entitled to protect people, and one way to protect that is, as was just mentioned, was to go after the person who takes the copy of the… the counterfeit copy of the bond and tries to pass it.

Stuart M Gold:

The second step would be, again, if they demonstrated that it was useful to have plates or pictures of parts of bonds that could be used to defraud people, again, with that kind of showing, perhaps they could sustain a statute that once again would protect against what they are trying to do.

It may be that after re-examining the statute, Congress would say bonds is a different story from currency.

I am not sure they would, but they might.

Again, we are dealing here with no demonstration.

Lewis F. Powell, Jr.:

Mr. Gold, you never have told me how Congress could demonstrate what you think is necessary.

Stuart M Gold:

I would think if there were… if the government came in, for instance, as I said, and presented a problem of plates existing–

Byron R. White:

Tell me where.

In this one suit?

Stuart M Gold:

–Into Congress.

Byron R. White:

Oh, into Congress?

You don’t demand that it be done here and–

Stuart M Gold:

Well–

Byron R. White:

–we put it of record in this lawsuit?

Stuart M Gold:

–No–

Byron R. White:

You want it by testimony, witnesses?

Stuart M Gold:

–Justice White, the record in this lawsuit, certainly in the district court, there is no evidence from the government.

In this court, they have tried to make a showing by telling… giving you various facts, like the Impacto story.

That is why I said that I am highly dubious that the government, if they had to present justifications if the statute is struck down and Congress is going to deal with it, that they could justify it, because we have not heard it.

I have not seen anything in their submissions to this Court, forgetting about whether they are in the record, but in their briefs that lead me to believe that Paragraph 6 of 474, with or without its exceptions, is a necessary tool for the government.

If you read the rest of the statute, the other sections that they have at their call to deal with the problem, it catches most things.

Indeed, there is in my mind, depending on how you read 474, Paragraph 2, you might even catch the Impacto, the full color, full size.

Byron R. White:

You don’t think Paragraph 6 furthers their interest at all?

Stuart M Gold:

It furthers their interest in the sense if you are going to accept that, if it in any way furthers it, it does, because certainly they are closing a tiny loophole that may exist, but I don’t believe in the First Amendment context–

Byron R. White:

Well, I suppose if the people at Time Magazine, if this was the law and if Time Magazine obeyed it, they wouldn’t have to worry about plates at Time Magazine.

Stuart M Gold:

–They wouldn’t have to worry about plates at Time Magazine–

Byron R. White:

Or any other publisher.

Stuart M Gold:

–But… Well, they would still have to check them if they wanted to make sure that no one was creating the plates.

Byron R. White:

Well, I know, but that is their point.

They want to narrow the universe of where they have to look, and I can imagine what kind of a problem they would get in if they wanted to get into Time Magazine and check.

Stuart M Gold:

Your Honor, clearly, if ease of enforcement were the only test here, and I think this Court has stated in the Village Schaumburg case that ease of enforcement is not enough to get them over the hurdle before they put our burden on demonstrating why we must have the ability to print these pictures and express ourselves in that way.

Stuart M Gold:

Yes, it is easier to enforce.

You can always go after a fly with a cannon.

That is what they have done here.

They have tried to… What I think they have done is, they want to close the loophole that does get at the person who is making full representations of currency that do present perhaps a danger, and doing that, they say it’s a lot easier if we just prevent anyone from using the symbol except in these certain ways, and when they choose the ways, they do not make any reasonable sense either.

This is just not a well constructed, well thought out statute.

And when I say statute, it is a scheme.

I include 504 in it.

The lines that the Congress drew with 504 just don’t make it.

In order to get at full color representations, you don’t ban all color.

If you are really after the actual color, you don’t ban all color.

The same with size.

If you want to prevent actual size representations, you don’t prevent any part of currency being represented in the actual size.

There is a picture in our appendix of George Washington in a life preserver, just the picture of George Washington.

That we were told was no good because that part of the bill that we did show was in exact size.

I submit that is not a danger.

That picture was not a danger to the currency.

And that Congress could pass a statute that would further the true interests that the government has a right to be interested in here, and that is preventing people from making things that do present a danger, and there is a way to do that without stopping Time from making its covers, or Gail Wagner from making her picture.

John Paul Stevens:

Mr. Gold, may I ask if there is anything at all in the legislative history to indicate that any publisher, Time or anyone else, has ever asked Congress to make certain exceptions such as you are asking us to make?

Apparently the statute came about because the Treasury Department decided that the statute was broader than they really needed and they cut back, but has anybody on your side of the fence ever said, let’s cut back on it?

Stuart M Gold:

I think there are two answers to that.

The first is, there is currently, as the government points out, there is currently some legislation that is pending in which certain publishers are trying to get color removed, but to go back to 1958, I am not sure why.

However, I submit that before that time, Time had not in fact, at least from Time’s point of view, Time had not used currency in their covers or internal pictures in a way that might violate… at that time any use that would have violated the statute.

Currency… I am sorry.

Our first instance with the enforcement of the statute was in 1965, when we wanted to present the Fowler cover, which is attached to the Schwartz affidavit.

Money has become a much more important symbol, in the sixties and particularly in the seventies.

Most of our covers and usage have been in the seventies.

So in 1958, I am not sure, at least from Time’s point of view, that someone had sat down and really had the problem.

It wasn’t brought home until we decided to make use of the symbol, and then found that the Secret Service was at our door with varying interpretations, and many interpretations that would stop us from publishing.

Indeed, one thing to keep in mind is that the Secret Service has interpreted this statute in its narrowest form whenever it could.

It has taken the… It has tried to close whatever it could to prevent things from being published, right down to when they at one point insisted that the representation of the dollar… of the currency had to relate directly to your story.

Stuart M Gold:

Your story had to be about that particular representation of currency to qualify under the purpose, and the Lockheed cover as an example, where we were told that that was one problem there.

Now, I realize that after this lawsuit was brought, and in this Court the Treasury Department and Secret Service have now withdrawn that interpretation, but if you consider the way the current statute has been interpreted by the enforcement agency, that also should raise some concern.

Warren E. Burger:

Let me ask you one hypothetical that may seem very far-fetched to you.

Suppose someone is charged with the traffic events of driving on a particular street in excess of the 30-mile-an-hour limit, and then it is tried on stipulation, in which it is stipulated that he was going 31 miles an hour, along with expert testimony of traffic people and a lot of others that 31 miles an hour is no more dangerous than 30 miles an hour, and therefore the statute is invalid, and the court responds, the trial court responds that legislation cannot be perfect.

Legislators are entitled to make general propositions.

On appeal, do you think that should be affirmed or reversed?

Stuart M Gold:

I would submit, and I understand the teachings of cases like Grayned that we can’t expect mathematical certainty, but that case, I don’t believe that that person would be asserting a First Amendment right to go 31 miles an hour.

I don’t think we can lose sight of the fact that what we are weighing here, what we are balancing is our First Amendment rights and those of others against the government’s assertion that it must have this–

Warren E. Burger:

The First Amendment has been thought to cover the right to travel, so it wouldn’t take a genius lawyer to bring this in.

Stuart M Gold:

–Well, that is true, and in that showing the burden, if there had been a showing that that furthered the government’s purpose, in fact, and there had been some showing, right or wrong, and the infringement on the First Amendment right was the ability to… whether you could go that extra mile, then I would say that is a different case and that probably would be affirmed.

But that is not our case.

Lewis F. Powell, Jr.:

Mr. Gold, was the substance of 474 enacted way back in 1864?

Stuart M Gold:

Yes, it was.

Lewis F. Powell, Jr.:

And you are taking the position that it has been for all those years a substantial infringement of free speech, for 119 years?

Stuart M Gold:

It sat there as one, yes.

Unfortunately, as I have said, it wasn’t brought home to us until we in our editorial judgment tried to make something–

Lewis F. Powell, Jr.:

But free speech in the United States has suffered as a result of this for all of those years?

Stuart M Gold:

–I submit it has suffered when people have tried to do these things and been told they couldn’t or suffered the consequences, Gail Wagner.

There is suffering when that gets confiscated.

There is suffering when people who may have known the statute was on the books… We don’t know how many covers perhaps never got thought of or even attempted, or other representations like Gail Wagner’s never were executed because the statute was on the books.

We will never know how much of a restraint on free speech it actually was.

Harry A. Blackmun:

Mr. Gold, I owe you an apology.

Gail Wagner’s middle name is Edward, so it must have been a man.

0 [Generallaughter.]

Stuart M Gold:

Thank you.

That concludes my presentation.

Warren E. Burger:

Do you have anything further, Mr. Schulder?

Elliott Schulder:

Yes, Your Honor.

I would like to make several quick points.

Warren E. Burger:

Two minutes you have.

Elliott Schulder:

First of all, Time tells us that Congress was in effect foolish to think that the statutory restrictions in this case would be affected, but we submit that that is really not something that this Court should quickly second guess.

For example, Mr. Gold said that he would be very suspicious it be were handed a thousand dollar bill with a portrait of Grant or Franklin on it, but he himself wasn’t sure whose portrait was on the bill, and it is clear that Congress was properly or could properly have been concerned with people not as astute as counsel in this case.

Mr. Gold has also suggested several alternative ways that the statute could be written, but I believe that there would be problems with each of those.

The first suggestion is that Congress could prohibit a duplicate or exact copy of a bill or plate or negative, but what is an exact copy?

A publisher could produce a copy that is only one and a half percent larger than the real thing, and most people would be fooled, especially when we are talking about all of the securities and obligations of the United States, including bonds, which most people have never seen.

John Paul Stevens:

I take it your position is that Congress could prohibit the manufacture of wooden nickels.

Elliott Schulder:

Well, we don’t have to go that far in this case.

John Paul Stevens:

Well, I don’t know why not.

Couldn’t they, under your view?

Elliott Schulder:

It conceivably could.

Yes.

We also… The other alternative would be to insert an intent element, but as we pointed out in our main brief in this case, an intent requirement would make the statute meaningless.

Time could publish an exact duplicate illustration of currency with the perfectly innocent intent of providing news and exercising its First Amendment rights, and yet people could then take that illustration and possibly pass it.

We can’t expect all publishers to be as responsible as Time, and so we submit that Congress clearly had these factors in mind when it enacted the statute.

Thank you.

Warren E. Burger:

Thank you, gentlemen.

The case is submitted.