UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF PENNSYLVANIA

TRANSCRIPT OF NON-JURY TRIAL
BEFORE THE HONORABLE LOWELL A. REED, JR.
UNITED STATES DISTRICT JUDGE

APPEARANCES:

Proceedings recorded by electronic sound recording; transcript produced by transcription service.

I N D E X

CLOSING BY: Ms. Beeson 

CLOSING BY: Ms. Stewart 

THE COURT: Decision 

(Call to the Order of the Court)

THE COURT: Good morning, everybody.

ALL COUNSEL: Good morning, Your Honor.

THE COURT: You're welcomed to be seated. For the record, we're here for the request by the plaintiffs for a temporary restraining order in the matter of American Civil Liberties Union and others versus Reno, civil number 98-5591. Could counsel identify themself who will be presenting this morning?

MS. BEESON: Yes, Your Honor, I'm Ann Beeson, lead counsel for the plaintiffs. And Chris Hansen will also be presenting this morning.

THE COURT: Okay. Thank you. For the defense, who will be presenting today?

MS. STEWART: Your Honor, good morning, Karen Stewart with the U.S. Department of Justice for Defendant Reno.

THE COURT: Thank you. To the extent we need it in terms of time, we'll take a recess in the middle of the morning and then a midday recess depending on what's going on, but that's my present plan, to have a reasonably set up day. Just for general planning purposes, the plaintiff is presenting two witnesses?

MS. BEESON: Yes, Your Honor.

THE COURT: And I didn't get a witness list from the defense, so I assume they're not presenting any live testimony?

MS. STEWART: No, Your Honor, that's correct.

THE COURT: Okay. Do the parties have any stipulations to offer the Court at this time -- 

MS. BEESON: Your Honor, -- 

THE COURT: -- or do the plaintiffs want to offer in stipulations as part of their case?

MS. BEESON: Your Honor, we have been going back and forth with Ms. Stewart over a draft fax stipulation. We have -- we do not have anything ready at the moment for the Court but we do believe that if we had a little time over lunch we might be able to resolve a few last details and get you something.

Now just so that you know what these facts are, they are generally just the background facts about the nature of the Internet that are derived in part from the first 48 paragraphs in ACUL versus Reno-1. But if the Court believes those would be helpful, then Ms. Stewart and I have discussed it and could get you something before the -- by the end of the hearing or shortly thereafter.

THE COURT: Let me -- thank you. Let me explain what I'll do throughout these proceedings. In the absence of a stipulation of fact, I'm going to rely, with the permission of the parties, I think it's already constructively given, on the declarations that have been filed for purposes of this hearing only. There having been no time or effort to complete any discovery, we're talking about a threshold type of hearing and I'll rely on the declarations and exhibits provided by the parties in the absence of a stipulation. 

So the things that I'm interested in factual aspects of this proceeding I have some notes on, but I don't think they're going to be in the type of stipulation you're talking about.

MS. BEESON: I think that's probably right, Your Honor.

THE COURT: They go to the effort to see if affirmative defenses technical problems connected with those types of things, and then they're not going to be in the -- the parties have quite a disagreement over those items, so there's not going to be a stipulation. 

And other than the gentleman's declaration that went into that detail that the plaintiffs have submitted and that the defense has -- the report to what I call the Bliley Report, maybe they call it something else on the hill, but the HR105-775 or whatever that is. I have never found a proper name for it anywhere yet. So that's the type of declaration material I'm going to rely on if there's no stipulation of fact or no testimony. And I think that -- if anybody thinks that's wrong, they'd better tell me at some point today. 

Ms. Beeson, you've -- I also want to compliment the parties for the reasonably comprehensive materials they've provided. And the reason for that compliment is more in the substance than in the superficials. I don't need any opening argument on these proceedings. As far as I'm concerned it's been made on paper and I've burned some midnight oil, and I'm sure you have as well, trying to keep up with the papers you've been filing.

So I've read them all. To say I've absorbed every fact that's in there, I guarantee you I haven't. So I'm ready to proceed with the testimony.

MS. BEESON: Thank you, Your Honor. Chris Hansen will be calling our first witness.

MR. HANSEN: Your Honor, plaintiffs call Norman Laurila.

THE COURT: Right up here, sir, be careful for the wires. Just come around the wall and up the steps. And if you could put your papers down, please, stand behind the chair, put your left hand on the Bible and take the oath.

NORMAN LAURILA, PLAINTIFF'S WITNESS, SWORN

COURT CLERK: Please be seated. Please state your name and spell your last name.

MR. LAURILA: My name is Norman Laurila, L-A-U-R-I-L-A.

THE COURT: Good morning, sir.

MR. LAURILA: Good morning, Your Honor.

THE COURT: Excuse me, counsel. You'll see me doing something kind of strange up here and I want to tell you what I'm doing. I'm constantly looking down, and you'll think I have some sort of a fixation on something over here. What's there is a video screen monitor which has the real time on it and I keep notes by real time so I can go back to the videotapes and find what I want.

So you may think I'm looking at the witness and I'm looking down at the monitor which I put down there purposely so it wouldn't interfere with the jury or something like that. So that's just a little tidbit you'll see me doing and that's the end of that subject. Go ahead, Mr. Hansen.

MR. HANSEN: Thank you, Your Honor.

DIRECT EXAMINATION

BY MR. HANSEN:

QMr. Laurila, what is your current occupation?

AI'm the founder and owner of A Different Light Bookstores.

QWould you describe your educational background, please?

AI have a BSC from the University of New York at Albany.

QAnd what is -- can you describe your employment history since college?

ADuring college I started work for a gay bookstore in Toronto and opened my first store in Los Angeles in 1979, so my entire adult working life has been for the bookstores.

QHave you actually stood behind the counter in a retail bookstore and sold books to people?

AYes, originally I was the only employee and we were so well received in LA that we actually had what people like to refer to themselves as dosens (phonetic). They actually volunteered to work in the store for the first couple of years.

QHow long have you been the owner of A Different Light Bookstore?

AI owned 50 percent from day one until May of this year when I inherited the other 50 percent.

QAnd the bookstore was founded when?

A1979.

QWould you briefly describe what A Different Light is?

AA Different Light is a gay and lesbian bookstore. We try and carry everything that's for, by and about gay men and lesbians, as well as being considered a community center of sorts. In our three stores we have upwards of 500 events a year, most of which are readings by authors who have new books out. But we also have events for parents and children. We have a video series. We have free bulletin boards. We give away a tremendous amount of free literature, flyers, newspapers, that sort of thing.

QThe books that you carry in the bookstore, are they limited to books that are gay themed?

ANot necessarily. We carry a lot of non gay material by gay authors. So, for instance, we have every novel of Truman Capote or Gore Vidal or Elizabeth Dowen or a variety of others. But as a general rule, we try and -- we hope that there's some gay content somewhere in the book itself.

QDo you also carry some books that might be of general interest but are also of interest to the gay community?

AYes, our stores very much cater to the community in which they are. So in Los Angeles we're across the street from the Pacific Design Center, so that store carries a lot of design books just because that's something that the community there wants. Also, you know, we carry a lot of celebrity biographies and that sort of thing, which are certainly peripheral titles, but which are of interest to our customers.

QDo you carry books on travel?

AYes, we do.

QWhy?

AWell because we think that a lot of our customers travel and we also carry a lot of books for what we think of as armchair travelers. So we have specific gay guides to various cities in the world or worldwide guides, but we also have just general guides to London, Paris, Rome, Florence, that sort of thing. One of our top selling travel books right now is Traveling with Your Pet, so that isn't specifically a gay or lesbian title, but it's obviously of something of great interest.

QDo you also have events in the store for people and their pets?

AWe have had, yes, we have. We've had Sunday morning events for owners with dogs and then owners with cats.

QIs A Different Light a for-profit entity?

AYes, it is.

QWhere is it located?

AWe have one store in West Hollywood, a second in New York City and the third is in San Francisco.

QDoes A Different Light maintain a Web site?

AYes, we do.

QFor how long have you maintained that Web site?

AThe Web site opened in 1995.

QWhy do you have a Web site?

AWe think of our customers as being fairly sophisticated, and, therefore, we like to try and keep up with them or stay ahead of them. And so we were very interested and anxious to be on the Web as quickly as we could. A lot of our customers we know use the Web and a lot of our customers we know use our Web site. That's a very economical way of getting in touch with them. It decreased by tens of thousands of dollars our postage costs in mailing out the flyers for the various events we have. 

And it allows them to peruse our entire inventory on the Web to make lists or comments for things that they might want to come in and pick up or they may choose to order over the Web or use our 800 number to order over.

QWhen you say you have your entire inventory on the Web, how many titles do you carry?

AWe carry about 21,000 titles. Most of what's on the Web, however, is -- our entire inventory is not annotated on the Web at the moment. It's just author, title, price, publisher. There probably are six or 700 titles that are specifically annotated on the Web and discussed.

QWhat do you mean by annotated?

AIt means there is either a review of them, our general comments about why we carry it or why it's an important book. There may be an interview with the author, an excerpt. So it's just more than title, name and price.

QWhy do you put that additional information on about those titles?

AWell a great many of these titles are not widely reviewed, so it's one way for our customers to hear about the titles. And it obviously makes the Web site much more personal. If it was purely just data, I mean, it wouldn't keep anyone's attention for very long. 

QSo you think -- 

AWe're in the business of selling books, so we're trying to entice people into considering buying what they're reading about.

QAnd you think the reviews and so on help you to that goal?

AAbsolutely.

QAre there other Web sites that link to A Different Light's Web site?

AThere are quite a number. For instance, we have an arrangement with the New York Times, so our site is linked to their site. If you're on the New York Times' site and you want to look up something in gay and lesbian literature, you'll find a link to our store. We also link to other gay and lesbian bookstores, the Web sites of their gay and lesbian magazines, anything that we think is of interest to our customers and/or the community.

QHow much business does A Different Light do over its Web site?

AWe do about three to $4,000 a month out of our San Francisco store which is roughly I would say 3 or 4 percent of its gross sales.

QWhat do you mean when you say you do it out of the San Francisco store since we're talking about the Web?

AThe Web is maintained by a woman who works for us in San Francisco and the serve we use is in Berkeley and the company that we use to -- you need a special server to put your actual database. So our inventory, which we have to update that once a month, which just -- which gives the title, author and the ability to search that is in Los Angeles.

THE COURT: Excuse me, do I get the impression that all of your Web site purchases go through the San Francisco store?

MR. LAURILA: Unless they use the 800 number. The 800 number is in New York, so if somebody chooses not to order via the Web or E-mail but to phone us directly, the regular phone numbers of the three bookstores are there as well as the 800 number, which is to New York.

THE COURT: And you accept orders obviously over the 800 number.

MR. LAURILA: That's what it was principally set up for.

THE COURT: And it happens that they, whoever does that for you, submits that order to the New York store.

MR. LAURILA: No, that line rings right in the New York store.

THE COURT: All right. Okay. I was assuming there might have been an intermediary, but I understand.

MR. LAURILA: No, no, in some respects we wish, because we have to go through all the trouble of packaging and mailing and everything else, but no, we do it directly in New York.

QDo you think there are customers who buy your books either at the bookstore itself or over the 800 number that learned about the information from your Web site?

AAbsolutely. Our customers rely very heavily on our recommendations, just as they would in any specialty store or any independent store. That's the difference between independent and a chain store. So that they're very interested in reading what we have to say about a title.

QYou said you had a contract with someone to host the server that carriers your inventory. Who has editorial control over A Different Light's Web site?

AWe have total editorial control over everything on the Web site.

QHow many people access A Different Light's Web site?

AIn the last month just a few short of 25,000 accessed the Web site.

QAnd is that -- what is that $25,000 -- 25,000 number, is that -- 

AThat's what referred to as hits.

QOkay. 

AWhich means that 25,000 people somehow entered our home page.

THE COURT: Excuse me for interrupting. But the access to the home page was had 25,000 times. There might have been fewer number of people who did it more than once.

MR. LAURILA: Absolutely, yes. 

AIn fact, there's another way of trying to figure out exactly how many people came in and that's to look at what's called the independent -- 

QLead hosts?

ARight, lead host. And that actually registers somebody's address coming in. Unfortunately, that means if you're with America Online, that registers once no matter if 50,000 America Online subscribers came into our site, it would only register once. But even with those single address entries, it's about 5300 a month.

QWhat percentage of the visitors to your site actually purchase something over the Web?

AWell we estimate around 1 or 2 percent. However, we think a tremendous number of people who access the site then either use the 800 number or come into the bookstore.

QWhy do people come to A Different Light's Web site?

AI think ease of information, anonymity to a greater extent. Since we do try and provide everything we possibly can on the subject and we -- our philosophy is not to censor, you can pretty much find anything to do with the subject that you might hope to find, and ultimately you do it in the privacy of your own home or wherever. And we have no knowledge of who you are or where you're coming from or anything else. So -- 

QWhy is that anonymity of value to the people who come your Web site?

AWell I think that's one of the benefits of the Web in general, but in terms of our stores, there are still so many social pressures, homophobic pressures against being gay or lesbian that unless you're entirely comfortable with your sexuality, you may not want people to know you're actually checking into a site. If you're exploring your sexuality or if you're confused or if you have a child who suddenly has come out to you or someone you know has AIDS or whatever, there are just a whole number of issues. Religious issues, we have a very large religion section. So if yo