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Bella Lewitsky Dance Foundation v. Frohnmayer (excerpts)
754 F.Supp. 774 (C.D.California 1991)

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ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT. Davis, District Judge: . . . FACTS: The Parties: Plaintiff Bella Lewitzky Dance Foundation ("Foundation") is a non-profit corporation which does business as the Lewitzky Dance Company. The Foundation was incorporated in California in 1968. It creates and performs modern dance works throughout the United States and foreign countries. Bella Lewitzky is the Artistic Director of the company. She has been actively involved in modern dance for over 50 years. The foundation has been a recipient of NEA grants since 1972, and in that time has been awarded more than $1,400,000. The grants, and funds provided by private donors, have been used by the Foundation to support the Dance Company.

Plaintiff Newport Harbor Art Museum ("Museum") is a nonprofit corporation founded in 1963 to promote the visual arts. The Museum maintains a permanent collection and sponsors and presents temporary exhibitions which are shown at its museum in Newport Beach and also loaned to other museums around the country. Thomas H. Neilsen is the President of the Museum and a member of its board. During the past 18 years the Museum has received fifty six NEA grants totaling $1,263,020.

Defendants are the National Endowment for the Arts ("NEA") and its Chairperson, John E. Frohnmayer. The NEA is an independent agency of the United States. . . . Congress created the NEA to provide support for the arts. The Chairperson, with the advice of the National Council on the Arts, is charged with establishing and carrying out a program of financial support for specific programs, projects, and productions. . . .

The Grant Process: At all times relevant to this litigation, the procedure to obtain a grant from the NEA began by the filing of an application. The application was generally submitted in the fiscal year prior to the year in which the funding was required. The applicant was required to describe the project or production for which the funds would be used, summarize the estimated costs of the project, specify the total amount requested from the NEA, and provide data regarding the grantee's overall fiscal activity, including information about private sources of funding and other revenues. If approved for a grant, the applicant would then submit a "Request for Advance or Reimbursement" in order to obtain any of the proceeds of the award.

On October 23, 1989, Congress amended the statutory framework within which the NEA operates by enacting Section 304 of the Department of the Interior and Related Agencies Appropriation Act of 1990 . . . Sec. 304(a) of the Act provides:

None of the funds authorized to be appropriated for the National Endowment for the Arts . . . may be used to promote, disseminate, or produce materials which in the judgment of the National Endowment for the Arts . . . may be considered obscene, including but not limited to, depictions of sadomasochism, homoeroticism, the sexual exploitation of children, or individuals engaged in sex acts and which, when taken as a whole, do not have serious literary, artistic, political or scientific value.

To implement this Congressional directive, the NEA added a certification requirement to the "Request for Advance or Reimbursement." The new section of this form required recipients to certify to compliance with certain "General Terms and Conditions for Organizational Grant Recipients." Paragraph Two of the Terms and Conditions contained language drawn directly from Sec. 304(a), described above. Thus, for any of the grant funds to be released, the grantee was required to certify in advance that none of the funds awarded would be used "to promote, disseminate, or produce materials which in the judgment of the NEA . . . may be considered obscene."

Plaintiffs' Experience With The Grant Process: On January 12, 1989, the Foundation applied to the NEA for a 1990-1991 grant. The grant was requested for the purpose of providing partial salary support to the Foundation, and thus assisting the Foundation in developing new works, upgrading its repertoire, and aiding the professional development of the Foundation's artists.

After enactment of Sec. 304, the NEA awarded the Foundation a grant of $72,000. The Foundation was notified of the award on January 4, 1990. Accompanying the award letter was a document setting forth terms and conditions applicable to NEA grant recipients ("Terms and Conditions"). As outlined above, this document included the condition derived from Sec. 304(a) in its Paragraph Two. Paragraph Five of the Terms and Conditions stated that "submission of a request for funds constitutes agreement to comply with all terms and conditions."

On May 15, 1990, the Foundation submitted to the NEA a "Request for Advance or Reimbursement" for partial payment of $15,000. As noted, the Request for Advance or Reimbursement required the grantee to certify to compliance with all NEA terms and conditions. Darlene Neel, the Foundation's company manager, completed the certification, but crossed out and initialed Paragraph Two of the Terms and Conditions, indicating the Foundation's refusal to be bound by that condition.

On May 29, 1990, the Foundation received the $15,000 it had requested. However, on that same day the Foundation also received a letter from Julianne Ross Davis, General Counsel to the NEA. This letter informed the Foundation that none of the terms of the NEA grant were optional, that the Foundation could not advise the NEA as to which terms and conditions it did not agree to accept, and that the Foundation was bound by all of the Terms and Conditions as stated in the grant award letter if it wished to use the grant funds awarded to it. In response to Ms. Davis' letter, the Foundation segregated the $15,000 it had already received. Those funds remain segregated and unspent. The balance of the Foundation's grant also remains undistributed.

The Museum's experience in the grant process was substantially similar. During the 1990 fiscal year, the Museum submitted grant applications for four projects. The NEA subsequently approved grants totaling $100,000 for all four projects. However, on May 24, 1990, when faced with the certification process described above as a prerequisite to obtaining the grant proceeds, the Museum's Board of Trustees resolved not to comply with Paragraph Two. Because it refused to make the required certification, the Museum received no portion of the grants for which it had been approved.

The NEA's Policy Statements: In July, 1990, the NEA issued and sent to grantees a "Statement of Policy and Guidance for the Implementation of Section 304." The policy statement provided, inter alia, that the Terms and Conditions would continue to contain the language of Sec. 304, and that the NEA would essentially rely on the standard of Miller v. California (413 U.S. 15, 1973), as a basis for making determinations regarding obscenity.

The July, 1990 Statement of Policy also set out "Procedures for Implementing Section 304." One such procedure provided that once a grant has been approved, if the NEA had reason to believe, through NEA sources or otherwise, that the grantee is violating Sec. 304, the NEA would advise the grantee in writing. The grantee would then have 30 days within which to submit "written justifications" of its work, after which time the NEA would determine whether the project violates Sec. 304. Further, the Statement of Policy provided that if the NEA did determine that the project violated Sec. 304, the NEA would recoup the grant pursuant to its civil and administrative remedial powers. . . .

In a Supplemental Statement of Policy, effective September 18, 1990, the NEA stated that "obscenity" for the purposes of Sec. 304 means "the sort of 'patently offensive representations or descriptions of that specific hard core sexual conduct given as examples in Miller v. California.'"

DISCUSSION: Standing: [The Court held that both the Foundation and the Museum have suffered injury in fact, due to the loss of grant funds, and that the injury was sufficient to establish that both have standing to pursue this action.]. . .

Constitutional Violations: 1. Fifth Amendment Due Process Claims: Plaintiffs contend that the certification they are required to make contains provisions on the subject of obscenity that are unconstitutionally vague, and thus violate the Fifth Amendment Due Process Clause. . . . Plaintiffs argue that unconstitutional vagueness arises because the determination of obscenity is in the judgment of the National Endowment for the Arts. Plaintiffs complain that they are left to speculate about how the NEA will assess obscenity. In response, the NEA argues that it has taken the policy position that it will rely on the well established standard of Miller v. California . . ., when applying the obscenity ban found in the certification requirement. Further the NEA contends that the Miller definition cannot be vague as a matter of law. However, the Court finds that the adoption of the Miller standard by the NEA does not cure the vagueness arising from the fact that the obscenity determination has been left to the judgment of the National Endowment for the Arts.
The NEA's vow to rely on Miller cannot cure the vagueness for two essential reasons. First, the NEA policy statements promising to rely on Miller are not legally binding on the agency. . . . The NEA may change or modify its policy at will.
Second, the NEA cannot provide the procedural safeguards outlined in Miller. In upholding the authority of a state government to pursue prosecutions for disseminating obscene materials, the Supreme Court in Miller focused on three key procedural safeguards. First, there must be a statute specifically defining the sexual conduct the depiction or description of which is forbidden, so that a potential violator has "fair notice" of what he can and cannot do. . . . Second, there must be a full adversarial trial. . . . Third, there must be a jury of citizens applying community standards for obscenity. . . .
Even if the Court were to make the generous assumption that the NEA could satisfy the first two procedural prerequisites, the third safeguard is unobtainable by an administrative agency of the federal government. Simply stated, the NEA is a national-level agency that, by hypothesis, is incapable of applying varying community standards for obscenity. Accordingly, even when the NEA promises to apply Miller, how it will endeavor to do so in a grantee's particular local community is a matter about which grantees may only "speculate[e] at their peril." . . . The NEA has not even attempted, to date, to make any announcement which might suggest how they intend to address this "community standards" issue.
Therefore, the Court finds that the NEA certification requirement is unconstitutionally vague because it leaves the determination of obscenity in the hands of the NEA.

2. The First Amendment Claims: Plaintiffs contend that the vagueness of the certification requirement, discussed above, violates the First Amendment as well as the Fifth Amendment because it creates a chilling effect on speech. . . . The chilling effect on these two plaintiffs arising from the NEA's vague certification requirement is unmistakably clear. The creative expression of the plaintiff Dance Foundation would necessarily be tempered were it to sign the certification and then take seriously its pledge not to promote, disseminate, or produce anything that the NEA in its judgment might find obscene. Similarly, in compiling works for inclusion in the various exhibits for which it obtained NEA grants, the plaintiff Museum would have to continually moderate its selection decisions with a view toward steering clear of what might strike the NEA as obscene. The court finds that because the certification requirement includes unconstitutionally vague provisions, it also violates grantees' First Amendment rights by causing a chilling effect on their artistic expression.
In addition, the chilling effect caused by the certification provisions is exacerbated by the practical realities of funding in the artistic community. Plainly stated, the NEA occupies a dominant and influential role in the financial affairs of the art world in the United States. Because the NEA provides much of its support with conditions that require matching or co-funding from private sources, the NEA's funding involvement in a project necessarily has a multiplier effect in the competitive market for funding of artistic endeavors. Amicus Theatre Communications Group points out that, "most non-federal funding sources regard the NEA award as an imprimatur that signifies the recipient's artistic merit and value. NEA grants lend prestige and legitimacy to projects and are therefore critical to the ability of artists and companies to attract non-federal funding sources." Grant applicants rely on the NEA well beyond the dollar value of any particular grant. As the NEA has made no showing to the contrary, the Court is inclined to agree. . . .

3. The Subsidy Decision Defense Defendants attempt to supersede all of the above analysis by arguing that the obscenity ban in the certification requirement does not violate the First or Fifth Amendments because "it is nothing more than a governmental decision not to subsidize the exercise of particular protected expression." . . . Defendants argue that this case should be analyzed in accordance with the line of cases which holds that the government has no constitutional obligation to subsidize an activity merely because it is constitutionally protected. . . . In response, the plaintiffs would characterize these cases as properly analyzed under the line of cases which holds that the government may not impose an unconstitutional condition on the exercise of a fundamental right. . . . But the outcome is the same [under either analysis]. . . . In simple terms, the government may well be able to put restrictions on who it subsidizes, and how it subsidizes, but once the government moves to subsidize, it cannot do so in a manner that carries with it a level of vagueness that violates the First and Fifth Amendments. . . .

Plaintiffs cannot, and do not, claim any "right" to an NEA grant. But once the plaintiffs were chosen for grants, on the basis of artistic merit, the government may not place restrictions on disbursement of those grants that require grantees to certify to obscenity provisions that are vague in violation of the Fifth Amendment, and which correspondingly cause a chilling effect in violation of the First Amendment. The facts before the Court go well beyond a simple decision not to subsidize obscene speech.

. . . [T]he Court finds that the certification requirement does, contrary to the NEA's statements, place an obstacle in the grant recipient's path to exercise of his constitutional speech rights. As noted above, the uncontested evidence is that the NEA plays an extensive role in the financing of the arts. As noted, the NEA often marks a project or production as worthy of support, including private support, by its decision to award a grant. Accordingly, it is evident that certain private funding follows NEA grants. Therefore, because of the NEA's influential role in funding the arts in the United States, an artist cannot, as defendants claim, ignore the vague certification requirement and be no worse off than if the NEA had not entered the funding business at all. The NEA's role and influence may mean that if an artist chooses not to be bound by the NEA's obscenity restriction, he will not be able to obtain private funding, and therefore, will be worse off than if he had not applied for an NEA grant at all. This is the type of obstacle in the path of the exercise of fundamental speech rights that the constitution will not tolerate.

THEREFORE, for all of the foregoing reasons, the Court GRANTS summary judgment in favor of the plaintiffs in each action, and DENIES the defendants' motions for summary judgment. In sum, no factual matters remain in dispute, plaintiffs have established constitutional violations on the two substantive grounds discussed, and the government's defense, that its certification requirement is merely part of a subsidy decision, is unavailing.

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