Powell’s Books v. Kroger – (Ninth Circuit; No. 09-35153)

The Ninth Circuit issued its opinion in Powell’s Books et al. v Kroger et al. The court held that a pair of Oregon statutes intended to stop child sexual abuse in its early stages were facially overbroad and criminalized a substantial amount of constitutionally protected speech (slip opinion pg. 11). The statutes in question were the “furnishing” statute (ORS § 167.054), which criminalized providing children under the age of 13 with sexually explicit material, and the “luring” statute (ORS § 167.057) which criminalized providing minors under the age of 18 with visual, verbal, or narrative descriptions of sexual conduct for the purpose of sexually arousing the minor or the furnisher, or inducing the minor to engage in sexual conduct. The state argued that sections 054 and 057 were aimed at the sharing of “hardcore pornography or material that is obscene to minors alone” (pg. 12).
The court decided the case on the basis of the statute’s overbreadth and applied a three part test. The first prong focused on the scope of the statute (United States v. Williams, 553 U.S. 285, 293 (2008)), the second focused on whether the statutes criminalized a “substantial amount” of expressive activity (Williams at 297). Finally the court considered whether the statute was “readily susceptible” to a limiting construction that would render it constitutional. Virginia v. Am. Booksellers Ass’n, 484 U.S. 383, 397 (1988).

The court found the scope of the statutes went beyond hardcore pornography. It held that the

“text and context show that the statutes cover far more than what might qualify as hardcore pornography. The statutory text makes no mention of “hardcore pornography,” but rather refers to “sexually explicit material” and a “visual representation or explicit verbal description or narrative account of sexual conduct.” (pg. 17).

Under the second prong the court used a rational basis test. It stated the framework under rational basis allows a prohibition on speech where the legislature finds “that exposure to material condemned by the statute is harmful to minors” (Ginsberg v. New York, 390 U.S. 629, 641 (1968)) even if the material is not obscene to adults (Am. Booksellers Found. v. Dean, 342 F.3d 96, 101 (2d Cir. 2003)). Otherwise speech that is neither obscene to youth nor subject to “some other legitimate proscription cannot be suppressed solely to protect the young from ideas or images that a legislative body thinks unsuitable for them.” Erznoznik v. Jacksonville, 422 U.S. 205, 213-14 (1975). Under this framework the court held that sections 054 and 057 swept up material that “taken as a whole” had serious “literary, artistic, political, or scientific value for minors” (pg. 23).

The court found no reasonable limiting construction. Limited by the prohibition on “insert[ing] missing terms into the statute” (Foti v. City of Menlo Park, 146 F.3d 629, 639 (9th Cir. 1998); see also Frink, 653 P.2d at 557-58) and against “rewrite[ing] a state law to conform it to constitutional requirements” (Am. Booksellers, 484 U.S. at 397) the court held it couldn’t save the statute. The court addressed the argument by the state that it wouldn’t bring prosecutions against individual business like Powell’s Books (pg. 26). The court held that it “may not uphold the statutes merely because the state promises to treat them as properly limited.” (pg. 26).

The case relies on a well established framework for First Amendment overbreadth analysis. The case best stands as an example for legislative clarity in crafting restrictions on speech.

Mt. Hawley Ins. – Remand or Remain?

The Ninth Circuit issued its opinion in Atlantic National Trust v. Mt. Hawley Ins. The court held that it lacked appellate jurisdiction to review a federal district court order remanding a case to state court based on a ground colorably characterized as a “defect” for purposes of 28 U.S.C. § 1447(c).

In October 2008 a fire caused $10million in damage to buildings owned by Lebanon Hardboard LLC. Atlantic National Trust and Tritalent Funding Group loaned Lebanon money and retained a security interest in the buildings. The secured parties required that Lebanon maintain fire insurance on the property and assign all insurance proceeds to the respective secured parties. At the time of the fire Lebanon had submitted an application for fire insurance to agents of Mt. Hawley Insurance, which had issued an insurance binder but not the actual policy before the fire. The binder failed to assign or mention Atlantic and Tritalent as payees.

In the suit that followed Atlantic filed a complaint against Mt. Hawley, its agents, Lebanon and Tritalent in Oregon state court. Atlantic gave Mt. Hawley and Lebanon courtesy copies of the complaint but didn’t serve them. Mt. Hawley filed a motion to remove to federal court, which Lebanon and Tritalent along with Atlantic later moved to remand back to state court.

In deciding whether the court could exercise appellate review the court used a two part test. The first part asks whether the remand order is based on grounds enumerated in § 1447(c). Next the court, under Supreme Court precedent in Powerex v. Reliant Energy Servs., Inc., 551 U.S. 224
(2007), determines whether the grounds that form the basis of the remand order are “colorable.” Only if a trial judge “exceeded his statutorily defined power” by remanding “a properly removed case on grounds that he had no authority to consider” can an appellate court exercise jurisdiction over the appeal (Slip Opinion pg. 7, citing Thermtron Prods. Inc. v. Hermansdorfer, 423 U.S. 336, 351 (1976)). The court found the district court based its order on a violation of the unanimity rule and this ground was both enumerated under § 1447(c) and colorable (i.e. wasn’t based on as docket congestion or abstention) (pg. 13,14).

The court’s opinion doesn’t create any new law. In fact it goes out of its way in the final pargarphs to make clear that some of Mt. Hawley’s arguments present unsettled law that the court doesn’t need to reach to decide whether it had jurisdiction (pg. 16). The opinion does serve as a great model for the framework to analyze a remand order under § 1447(c).