2005/06/15 Council Agenda Packet

App. B / Adult Businesses affairs of an enterprise through a "pattern of criminal activ- ity." That pattern of criminal activity may include obscenity violations, which in turn can expose violators to increased fines and penalties as well as forfeiture of all property acquired or used in the course of a RICO violation. These statutes generally enable prosecutors to obtain either crimi- nal or civil forfeiture orders to seize assets and may also be used to obtain injunctive relief to divest repeat offenders of financial interests in sexually oriented businesses. See 18 U.S.C. §§ 1961-68 (West Supp. 1988). RICO statutes may be particularly effective in dismantling businesses dominated by organized crime, but they may be applied against other targets as well. The Working Group believes that Minnesota should enact a RICO -like statute that would encompass increased penal- ties for using a "pattern" of criminal obscenity acts to conduct the affairs of a business entity. Provisions authorizing the seizure of assets for obscenity violations should be consid- ered, but the limitations imposed by the First Amendment must be taken into account. It has been argued that a RICO or forfeiture statute based on obscenity crime violations threatens to "chill protected speech" because it would permit prosecutors to seiz:-% non -ob- scene materials from distributors convicted of violating the obscenity statute. American Civil Liberties Union, Polluting The Censorship Debate: A Summary And Critique Of The Final Report Of The Attorney General's Commission On Pornography at 116-117 (1986). However, a narrow majority of the United States Supreme Court recently held that there is no constitutions- bar to a state's inclusion of substantive obscenity violations among the predicate offenses for its RICO statute. Sappenfield u. Indiana, 67 U.S.L.W. 4180, 4183-4184 (February 21, 1989). The Court recognized that "any form of criminal obscenity statute applicable to a bookseller will induce some tendency to self -censorship and have some inhibitory effect on the 404 Minnesota Attorney General's Report / App. B dissemination of material not obscene." Id. at 4184. But the Court ruled that, "the more assertion of some possible self - censorship resulting from a statute is not enough to render an anti -obscenity law unconstitutional under our prece- dent." Id. The Court specifically upheld RICO provisions which increase penalties where there is a pattern of multiple violations of obscenity laws. However, in a companion case, the Court also invalidated a pretrial seizure of a bookstore and its contents after only a preliminary finding of "probable cause" to believe that a RICO violation had occurred. Fort Wayne Books, Inc. u. Indiana, 67 U.S.L.W. 4180, 4184-4186 (February 21, 1989). The Court explained there is a rebuttable presumption that expressive materials are protected by the First Amendment. That presumption is not rebutted until the claimed justifica- tion for seizure of materiels, the elements of a RICO viola- tion, are proved in an adversary proceeding. Id. at 4185. The Court did not specifically reach the fundamental question of whether seizure of the assets of a sexually ori- ented business such as a bookstore is constitutionally per- missible once a RICO violation is proved. The Court ex- plained: [Flor the purposes of disposing of this case, we assume without deciding that bookstores and their contents are forfeitable (like other property such as a bank account or yacht) when it is proved that these items are property actually used in, or derived from, a pattern of violations of the state's obscenity laws. Id. at 4186. The Working Group believes that a RICO statute which provided for seizure of the contents of a sexually oriented business upon proof of RICO violations would have the potential to significantly curtail the distribution of ob- scene materials. Although Minnesota does not have a RICO statute, it does have a forfeiture statute permitting the seizure of money and property which are the proceeds of designated felony of - enc