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FORT WAYNE BOOKS v. INDIANA ET AL.

decided*fn*: February 21, 1989.

FORT WAYNE BOOKS, INC
v.
INDIANA ET AL.



CERTIORARI TO THE SUPREME COURT OF INDIANA.

White, J., delivered the opinion of the Court, in Part I of which Rehnquist, C. J., and Brennan, Blackmun, Stevens, O'Connor, Scalia, and Kennedy, JJ., joined, in Part II-A of which Rehnquist, C. J., and Brennan, Stevens, Scalia, and Kennedy, JJ., joined, in Parts II-B and II-C of which Rehnquist, C. J., and Blackmun, Scalia, and Kennedy, JJ., joined, and in Part III of which Rehnquist, C. J., and Brennan, Blackmun, O'Connor, Scalia, and Kennedy, JJ., joined. Blackmun, J., filed an opinion concurring in part and concurring in the judgment, post, p. 68. O'Connor, J., filed an opinion concurring in part and dissenting in part, post, p. 68. Stevens, J., filed an opinion dissenting in No. 87-614 and concurring in part and dissenting in part in No. 87-470, in which Brennan and Marshall, JJ., joined, post, p. 70.

Author: White

[ 489 U.S. Page 50]

 JUSTICE WHITE delivered the opinion of the Court.

We have before us two decisions of the Indiana courts, involving the application of that State's Racketeer Influenced and Corrupt Organizations (RICO) and Civil Remedies for Racketeering Activity (CRRA) Acts to cases involving bookstores containing allegedly obscene materials.

I

The two causes before us arise from wholly unrelated incidents.

A

Petitioner in No. 87-470, Fort Wayne Books, Inc., and two other corporations*fn1 each operated an "adult bookstore" in Fort Wayne, Indiana. On March 19, 1984, the State of Indiana and a local prosecutor, respondents here, filed a civil action against the three corporations and certain of their employees

[ 489 U.S. Page 51]

     alleging that defendants had engaged in a pattern of racketeering activity by repeatedly violating the state laws barring the distribution of obscene books and films, thereby violating the State's RICO law.*fn2 The complaint recited 39 criminal convictions for selling obscene publications from the three stores. App. 9-37. It was also alleged that there were currently other obscene materials available for sale in the stores. Id., at 37-44. The proceeds from the sales of obscene materials, it was alleged, were being used to operate and maintain the bookstores. Respondents sought civil injunctive relief to bar further racketeering violations, invoking the State's CRRA statute, Ind. Code § 34-4-30.5-1 et seq. (1988). Among the remedies requested in the complaint was forfeiture of all of Fort Wayne Books' property, real and personal, that "was used in the course of, intended for use in the course of, derived from, or realized through" petitioner's "racketeering activity." App. 47. Such forfeiture is authorized by the CRRA statute. Ind. Code § 34-4-30.5-3(a) (1988).

Respondents also moved, in a separate "Verified Petition for Seizure of Property Subject to Forfeiture," for the particular judicial order that is the subject of our consideration here. Specifically, respondents asked the Allen County Circuit Court "to immediately seize . . . all property 'subject to forfeiture' as set forth in [the CRRA] complaint." App. 51. Such pretrial seizures are authorized under Ind. Code § 34-4-30.5-3(b) (1988), which empowers prosecutors bringing CRRA actions to move for immediate seizure of the property subject to forfeiture, and permits courts to issue seizure orders "upon a showing of probable cause to believe that a violation of [the State's RICO law] involving the property in question has occurred." The seizure petition was supported

[ 489 U.S. Page 52]

     by an affidavit executed by a local police officer, recounting the 39 criminal convictions involving the defendants, further describing various other books and films available for sale at petitioner's bookstores and believed by affiant to be obscene, and alleging a conspiracy among several of petitioner's employees and officers who had previous convictions for obscenity offenses. App. 55-78.

The trial court, ex parte, heard testimony in support of the petition and had supporting exhibits before it. On the same day, the court entered an order finding that probable cause existed to conclude that Fort Wayne Books was violating the State RICO law, and directing the immediate seizure of the real estate, publications, and other personal property comprising each of the three bookstores operated by the corporate defendants. Id., at 81-83. The court's order authorized the county sheriff to padlock the stores. This was done, and a few days later, the contents of the stores were hauled away by law enforcement officials. No trial date on the CRRA complaint was ever set.

Following the March 1984 seizure of the bookstores, Fort Wayne Books sought to vacate the ex parte seizure order. An adversarial hearing on a motion to vacate the order based on federal constitutional grounds failed to yield relief. Other efforts to obtain some measure of relief also failed. The trial court did, however, certify the constitutional issues to the Indiana Court of Appeals. In June 1985, that court held that the relevant RICO/CRRA provisions were violative of the United States Constitution. 4447 Corp. v. Goldsmith, 479 N. E. 2d 578 (Ind. App.).*fn3 The Indiana Supreme Court reversed,

[ 489 U.S. Page 53]

     upholding the constitutionality of the CRRA statute as a general proposition and the pretrial seizure of Fort Wayne Books' store as a specific matter. 4447 Corp. v. Goldsmith, 504 N. E. 2d 559 (1987).

We granted Fort Wayne's petition for certiorari, 485 U.S. 933 (1988), for the purpose of considering the substantial constitutional issues raised by the pretrial seizure.

B

In No. 87-614, an investigation of adult bookstores in Howard County, Indiana, led prosecutors there, in April 1985, to charge petitioner Sappenfield with six counts of distribution of obscene matter, in violation of Ind. Code § 35-49-3-1 (1988). In addition, employing the 1984 amendments to the Indiana RICO statute discussed above, prosecutors used these alleged predicate acts of obscenity as a basis for filing two charges of RICO violations against petitioner. App. 142-143, 148-149. The obscenity charges were Class A misdemeanors under Indiana law, the racketeering offenses Class C felonies.

The trial court dismissed the two RICO counts on the ground that the RICO statute was unconstitutionally vague as applied to obscenity predicate offenses. The Indiana Court of Appeals reversed and reinstated the charges against petitioner. Relying on the Indiana Supreme Court's opinion under review here in No. 87-470, 4447 Corp. v. Goldsmith, supra, the Court of Appeals held that "Indiana's RICO statute is not unconstitutional as applied to the State's obscenity statute." 505 N. E. 2d 504, 506 (1987). The Indiana Supreme Court declined to review this holding of the Indiana Court of Appeals.

[ 489 U.S. Page 54]

     We granted certiorari, 485 U.S. 933 (1988), and consolidated this case with No. 87-470, to consider the common and separate issues presented by both cases.

II

Since it involves challenges to the constitutionality of the Indiana RICO statute, we deal first with No. 87-614.

As noted above, petitioner was charged with six substantive obscenity violations and two RICO offenses. App. 138-149. Petitioner challenged only the latter charges, raising no objection to the obscenity indictments. Id., at 150. He makes no claim here that the Constitution bars a criminal prosecution for distributing obscene materials.*fn4 Rather, petitioner's claim is that certain particulars of the Indiana RICO law render the prosecution of petitioner under that statute unconstitutional. Petitioner advances several specific attacks on the RICO statute.

A

Before we address the merits of petitioner's claims, we must first consider our jurisdiction to hear this case. The relevant statute, 28 U. S. C. § 1257, limits our review to "[f]inal judgments or decrees" of the state courts. The general rule is that finality in the context of a criminal prosecution is defined by a judgment of conviction and the imposition of a sentence. See Parr v. United States, 351 U.S. 513, 518 (1956); Berman v. United States, 302 U.S. 211, 212 (1937). Since neither is present here, we would usually conclude that the judgment below is not final and is hence unreviewable.

There are, however, exceptions to the general rule. See Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975). Cox

[ 489 U.S. Page 55]

     identified four categories of cases in which a judgment is final even though further proceedings are pending in the state courts. This case fits within the fourth category of cases described in Cox:

"[W]here the federal issue has been finally decided in the state courts with further proceedings pending in which the party seeking review here might prevail on the merits on nonfederal grounds, thus rendering unnecessary review of the federal issue by this Court, and where reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action . . . in the state court proceedings still to come. In these circumstances, if a refusal immediately to review the state-court decision might seriously erode federal policy, the Court has entertained and decided the federal issue, which itself has been finally determined by the state courts for the purposes of the state litigation." Id., at 482-483.

This case clearly satisfies the first sentence of the above-cited passage: petitioner could well prevail on nonfederal grounds at a subsequent trial, and reversal of the Indiana Court of Appeals' holding would bar further prosecution on the RICO counts at issue here. Thus, the only debatable question is whether a refusal to grant immediate review of petitioner's claims "might seriously erode federal policy." Ibid.

Adjudicating the proper scope of First Amendment protections has often been recognized by this Court as a "federal policy" that merits application of an exception to the general finality rule. See, e. g., National Socialist Party of America v. Skokie, 432 U.S. 43, 44 (1977) (per curiam); Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 246-247 (1974). Petitioner's challenge to the constitutionality of the use of RICO statutes to criminalize patterns of obscenity offenses calls into question the legitimacy of the law enforcement practices of several States, as well as the Federal Government.*fn5

[ 489 U.S. Page 56]

     Resolution of this important issue of the possible limits the First Amendment places on state and federal efforts to control organized crime should not remain in doubt. "Whichever way we were to decide on the merits, it would be intolerable to leave unanswered, under these circumstances, an important question of freedom of the press under the First Amendment; an uneasy and unsettled constitutional posture [of the state statute in question] could only further harm the operation of a free press." Tornillo, supra, at 247, n. 6.

Justice O'Connor contends that a contrary result is counseled here by our decision in Flynt v. Ohio, 451 U.S. 619 (1981) (per curiam). Post, at 69-70. But as the Court understood it, "[t]he question presented for review [in Flynt was] whether on [that] record the decision to prosecute petitioners was selective or discriminatory in violation of the Equal Protection Clause." Flynt, supra, at 622 (emphasis added). The claim before us in Flynt was not a First Amendment claim, but rather an equal protection claim (albeit one in the context of a trial raising First Amendment issues). As a result, Cox 's fourth exception was held to be inapplicable in that case. Though the dissenters in Flynt disagreed with the premise of the Court's holding, and contended that that case was a First Amendment dispute that demanded immediate attention under Cox 's fourth exception, see 451 U.S., at 623 (Stewart, J., dissenting); id., at 623-624 (Stevens, J.,

[ 489 U.S. Page 57]

     dissenting), the fact is that no Member of the Court concluded in Flynt -- as Justice O'Connor does today -- that where an important First Amendment claim is before us, the Court should refuse to invoke Cox 's fourth exception and hold that we have no authority to address the issue.

Consequently, we conclude that this case, which clearly involves a First Amendment challenge to the facial validity of the Indiana RICO statute, merits review under the fourth exception recognized by Cox to the finality rule.

B

Petitioner's broadest contention is that the Constitution forbids the use of obscenity violations as predicate acts for a RICO conviction. Petitioner's argument in this regard is twofold: first, that the Indiana RICO law, as applied to an "enterprise" that has allegedly distributed obscene materials, is unconstitutionally vague; and second, that the potential punishments available under the RICO law are so severe that the statute lacks a "necessary sensitivity to first amendment rights," Brief for Petitioner in No. 87-614, p. 23. We consider each of these arguments in turn.

(1)

The "racketeering activities" forbidden by the Indiana RICO law are a "pattern" of multiple violations of certain substantive crimes, of which distributing obscenity (Ind. Code § 35-49-3-1) is one. Ind. Code § 35-45-6-1 (1988). Thus, the RICO statute at issue wholly incorporates the state obscenity law by reference.

Petitioner argues that the "inherent vagueness" of the standards established by Miller v. California, 413 U.S. 15 (1973), are at the root of his objection to any RICO prosecution based on predicate acts of obscenity. Brief for Petitioner in No. 87-614, pp. 24-33. Yet, this is nothing less than an invitation to overturn Miller -- an invitation that we reject. And we note that the ...


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