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2018-09-28T09:22:00.001-04:00

Tsogo Dealers Go Head to Head in the Tsogo Sun Dealer Championship at Garden Route Casino
To celebrate the seventh annual Tsogo Sun Dealer Championship, the host property, Tsogo Sun’s Garden Route Casino, was transformed into the MS Garden Route with a nautical theme for the event. The Championship which took place on the 19 September, saw 17 dealers from all 13 Tsogo Sun casinos around the country compete for the coveted top spot in this competition.
The Dealer Championship got underway at two roulette tables and two blackjack tables that each had beautiful beach-themed layouts and were sponsored by TCS John Huxley. Managers from the various casinos within the Tsogo Sun group tested the skills and knowledge of the 17 dealers who were then scored using an online app that was specially created by the Tsogo Sun IT Development team.
At a glittering gala dinner in the Bravo Lounge, the top five dealers were called upon to present a prepared speech and also answer an unprepared question. In first place was Tebogo Mokwa from Silverstar Casino who took home R10,000; Sinazo Madlanga from Hemingway’s Casino who walked away with the R5,000 second place prize and Danie van der Merwe from Caledon Casino in third place who won R3,000. “The bar is raised higher every year and this is a reflection of the high calibre of dealers we have in Tsogo Sun. No longer is the job purely about technical skills, but customer interaction and knowledge of the property have become a minimum requirement. Tsogo Sun dealers are on a par with the best in the World,” said Steve Hight, Director of Gaming for Tsogo Sun.
Hayley Brugger, Gaming Manager at Garden Route Casino, says: “We are very honoured to have hosted the event that has become a highlight of the Tsogo Sun calendar. I am especially proud of my team who made this event spectacular for those attending. Lastly a huge thank you to Nicci Smith and her team at TCSJOHNHUXLEY for once again supporting the event.”
Nicci Smith, TCSJOHNHUXLEY Managing Director Africa further comments, “Once again, we are privileged to be a part of this significant annual gaming event in which we can celebrate Tsogo Sun’s most accomplished dealers. Congratulations to the Tebogo Mokwa and thank you Ryan and Hayley for hosting a spectacular event.”

The Cliché That "The Constitution Is Not A Suicide Pact" | FindLaw

2017-07-07T08:59:00.003-04:00

The Cliché That "The Constitution Is Not A Suicide Pact" | FindLaw

THE CLICHÉ THAT "THE CONSTITUTION IS NOT A SUICIDE PACT":
Why It Is Actually Pro-, not Anti-, Civil Liberties

By GEORGE P. FLETCHER

Tuesday, Jan. 07, 2003

We live in a time when citizens - and indeed, even constitutional lawyers - are ready to compromise constitutional guarantees for the sake of increased security, whether real or imagined. Those who argue that we must be flexible in times of danger often mouth the slogan, "The Constitution is not a suicide pact." By that, they mean that civil liberties only go so far, and at extremes, security must take precedence.

This supposed kernel of wisdom has become part of the post-9-11 orthodoxy. But a closer look at the slogan's use in judicial opinions, over time, shows that it hardly supports the anti-civil-liberties positions for which it is now so often cited.

Indeed, over the course of history, the rhetoric of "suicide pacts" has far more frequently been invoked in the course of arguments for protecting constitutional rights - not arguments for sacrificing them to security concerns.

The Genesis and History of the "Suicide Pact" Slogan

Justice Robert Jackson was the first to use the phrase "suicide pact" - in his dissent in the 1949 case of Terminiello v. Chicago. His initial usage was also, to my knowledge, the first and only anti-civil liberties judicial usage of the maxim.

In Terminiello, the Supreme Court upheld the free speech rights of a right-wing hatemonger. In Jackson's dissent, he suggested that the inflammatory speech was likely to produce a violent reaction from the mob outside. Jackson had just been a prosecutor in Nuremberg. And he was fearful that the kind of fascistic acts he had just prosecuted might become commonplace in the United States. He worried about an American version of the Weimar complex: If we do not crack down on Hitlerian types, he thought, our fate may be like that of Germany in 1933.

In the 1960's Justice Arthur Goldberg revived the "suicide pact" maxim in Kennedy v. Mendoza-Martinez and Aptheker v. Secretary of State, but for a very different purpose. Goldberg protected the rights of Communists to travel, and of wartime military deserters against loss of their citizenship, at the same time that he gave verbal deference to the tough-minded view that we would never commit national suicide. The result was pro-civil liberties, and the idea was that the initial Constitutional design was wise, and should be followed.

Even since then, the standard usage of the phrase has been to guard the judge's flank against critics anxious about the stability of American democracy - not to kowtow to such critics by sacrificing liberty for security. The phrase is used to explain that Constitutional rights can be upheld without having security catastrophically suffer.

Recent Judicial Uses of the "Suicide Pact" Slogan Are Also Pro-Civil Liberties

This pattern of decrying-suicide-pacts-while-protecting-liberty was recently confirmed again. Late last year, federal district judge Harold Baer used the slogan when he declared unconstitutional a New York prohibition against wearing masks in public places, in the case of Church of the American Knights of the KKK v. Kerik.

The statute at issue was aimed at suppressing demonstrations by the Ku Klux Klan. (Indeed, it was a successor organization to the Klan that objected to the restriction.) Judge Baer held that the statute violated the First Amendment's guarantee of free speech.

He bowed in ritual obeisance to the "suicide-pact" slogan. But he also added this graceful conclusion: "[T]he rational and measured exercise of jurisprudence must be zealously sustained even in time of war, including the war on terrorism."

Compromises for the sake of security might resonate favorably with pundits in the media, but they will not get the same hearing in Judge Baer's courtroom. And his decision shows just how far the suicide pact slogan has come - and how neatly its use has been inverted - since Terminiello. One can imagine Justice Jackson dissenting to Baer's decision too, had he had the opportunity.

Consider, also, the 1999 opinion in Edmond v. Goldsmith by Richard Posner - the prolific author who doubles as Chief Judge of the U.S. Court of Appeals for the Seventh Circuit, in Chicago. There, Judge Posner declared an Indiana "routine roadblock" provision unconstitutional. As he explained, it violated the Fourth Amendment prohibition against unreasonable searches and seizures.

The case was simple: The precedents forbade routine searches aimed at producing evidence of criminal activity, and the "routine roadblock" statute plainly fit the bill. However efficient or reasonable it might be for the Indiana police to conduct their routine roadblock searches, past decisions held that this tactic, under the Constitution, was off limits.

Posner was quick to add that in a real emergency, public safety might require the opposite decision: "The Constitution is not a suicide pact," he emphasized. But he also added, "no such urgency has been shown here." Like Judge Baer, Posner subscribes to the judicial inversion of the phrase - using it as a sop to those with security fears, rather than as a reason to curtail liberty.

Pundits, Unlike Judges, Tend to Use the "Suicide Pact" Slogan to Defeat Civil Liberties

If judges have inverted the "suicide pact" slogan, however, pundit have hewn more closely to Jackson's original meaning. For them, the situation seems always to be so urgent that a compromise with liberty is required.

Rather than being assured that the Constitution was not designed as, and thus will not become, a suicide pact, they are constantly worried that without an immediate crackdown, it will soon morph into just such a pact. Academics invoke "suicide pacts" in the law reviews when they want to demonstrate that they are tough-minded about hypothetical conflicts between liberty and security; editorialists do the same.

Even Posner-as-pundit falls victim to this thinking, though Posner-as-Judge does not. In a forthcoming book, for example, Posner defends Lincoln's suspension of habeas corpus during the Civil War. Indeed, he even hints that it might have been acceptable for Lincoln to suspend the election of 1864, if the military circumstances had required it, simply because "by November 1864 the North was close to victory."

As pundit, Posner advocates "pragmatic" decisionmaking - the balancing of security against liberty - without recognizing that either value has priority. And yet when Posner is sitting as a judge, his strong commitment to the Constitution takes over - despite his desire to appear to be a hard-headed, pragmatic "balancer."

Consider, also, the views of Alan Dershowitz who as the ubiquitous pundit would allow torture to, for instance, find the location of a large and lethal "ticking bomb" (as long as a "torture warrant" were issued first).

Of course, the problem in real life is how one would ever know that the bomb is really ticking, or that torture would produce reliable information to save the endangered persons. Ironically, Dershowitz's "torture warrant" idea may be wiser than he realizes: If judges' past behavior is a proper guide, they would probably conclude, with Judge Posner, that hypothetically, when "the urgency" is established, they might issue a warrant but "no such urgency has been shown here."

Judges Caving to National Security Fears Have Not Relied on the "Suicide Pact" Slogan

To be sure, judges have made some very bad decisions in the name of national security. The most notorious of all, of course, was the Korematsu decision, in which the Supreme Court upheld the criminal conviction of a Japanese-American who refused to obey a military order to evacuate a designated region on the West Coast.

And just last month in the Jose Padilla case, federal district judge Michael Mukasey rendered an anti-civil liberties decision in the war on terrorism. Mukasey upheld the principle of using administrative detention to confine persons - such as Padilla - whom the Executive has designated, with "some evidence," as "enemy combatants" collaborating with terrorist organizations. Until this decision, we had all thought that the executive could not confine citizens simply on grounds of suspected danger.

History has been unkind to the Supreme Court's decision in Korematsu. Few, if any, would be persuaded today that safeguarding the equal rights of Japanese-Americans would have brought us close to national suicide. Similarly, a huge outcry would occur if the government were to create detention camps for Iraqi-Americans now, based on the same reasoning.

We can only hope for a similarly contemptuous historical verdict (or an immediate reversal on appeal) on Judge Mukasey's decision in the Padilla case.It would be a wonderful irony if the decision reversing Mukasey's order, by the U.S. Court of Appeals for the Second Circuit, cited the "suicide pact" metaphor - and if it did, as I have explained, the pro-civil liberties usage would follow the modern norm.

Fortunately, since Jackson's dissent, our judges have been more committed to constitutional principles than the rhetoric of suicide pacts would indicate - and indeed, have turned that rhetoric upon its head. We can only hope that judges will continue to speak of "suicide pacts" as a sign that they desire to uphold civil liberties in the particular case, not destroy them.

George P. Fletcher is Cardozo Professor of Jurisprudence at the Columbia Law School and the author, most recently, of Romantics at War: Glory and Guilt in the Age of Terrorism.

THE CLICHÉ THAT "THE CONSTITUTION IS NOT A SUICIDE PACT": Why It Is Actually Pro-, not Anti-, Civil Liberties By GEORGE P. FLETCHER Tuesday, Jan. 07, 2003 We live in a time when citizens - and indeed, even constitutional lawyers - are ready to compromise constitutional guarantees for the sake of increased security, whether real or imagined. Those who argue that we must be flexible in times of danger often mouth the slogan, "The Constitution is not a suicide pact." By that, they mean that civil liberties only go so far, and at extremes, security must take precedence. This supposed kernel of wisdom has become part of the post-9-11 orthodoxy. But a closer look at the slogan's use in judicial opinions, over time, shows that it hardly supports the anti-civil-liberties positions for which it is now so often cited. Indeed, over the course of history, the rhetoric of "suicide pacts" has far more frequently been invoked in the course of arguments for protecting constitutional rights - not arguments for sacrificing them to security concerns. The Genesis and History of the "Suicide Pact" Slogan Justice Robert Jackson was the first to use the phrase "suicide pact" - in his dissent in the 1949 case of Terminiello v. Chicago. His initial usage was also, to my knowledge, the first and only anti-civil liberties judicial usage of the maxim. In Terminiello, the Supreme Court upheld the free speech rights of a right-wing hatemonger. In Jackson's dissent, he suggested that the inflammatory speech was likely to produce a violent reaction from the mob outside. Jackson had just been a prosecutor in Nuremberg. And he was fearful that the kind of fascistic acts he had just prosecuted might become commonplace in the United States. He worried about an American version of the Weimar complex: If we do not crack down on Hitlerian types, he thought, our fate may be like that of Germany in 1933. In the 1960's Justice Arthur Goldberg revived the "suicide pact" maxim in Kennedy v. Mendoza-Martinez and Aptheker v. Secretary of State, but for a very different purpose. Goldberg protected the rights of Communists to travel, and of wartime military deserters against loss of their citizenship, at the same time that he gave verbal deference to the tough-minded view that we would never commit national suicide. The result was pro-civil liberties, and the idea was that the initial Constitutional design was wise, and should be followed. Even since then, the standard usage of the phrase has been to guard the judge's flank against critics anxious about the stability of American democracy - not to kowtow to such critics by sacrificing liberty for security. The phrase is used to explain that Constitutional rights can be upheld without having security catastrophically suffer. Recent Judicial Uses of the "Suicide Pact" Slogan Are Also Pro-Civil Liberties This pattern of decrying-suicide-pacts-while-protecting-liberty was recently confirmed again. Late last year, federal district judge Harold Baer used the slogan when he declared unconstitutional a New York prohibition against wearing masks in public places, in the case of Church of the American Knights of the KKK v. Kerik. The statute at issue was aimed at suppressing demonstrations by the Ku Klux Klan. (Indeed, it was a successor organization to the Klan that objected to the restriction.) Judge Baer held that the statute violated the First Amendment's guarantee of free speech. He bowed in ritual obeisance to the "suicide-pact" slogan. But he also added this graceful conclusion: "[T]he rational and measured exercise of jurisprudence must be zealously sustained even in time of war, including the war on terrorism." Compromises for the sake of security might resonate favorably with pundits in the media, but they will not get the same hearing in Judge Baer's courtroom. And his decision shows just how far the suicide pact slogan has come - and how neatly its use has been inverted - since Terminiello. One can imagine Justice Jackson dissenting to Baer's decision too, had he had the opportunity. Consider, also, the 1999 opinion in Edmond v. Goldsmith by Richard Posner - the prolific author who doubles as Chief Judge of the U.S. Court of Appeals for the Seventh Circuit, in Chicago. There, Judge Posner declared an Indiana "routine roadblock" provision unconstitutional. As he explained, it violated the Fourth Amendment prohibition against unreasonable searches and seizures. The case was simple: The precedents forbade routine searches aimed at producing evidence of criminal activity, and the "routine roadblock" statute plainly fit the bill. However efficient or reasonable it might be for the Indiana police to conduct their routine roadblock searches, past decisions held that this tactic, under the Constitution, was off limits. Posner was quick to add that in a real emergency, public safety might require the opposite decision: "The Constitution is not a suicide pact," he emphasized. But he also added, "no such urgency has been shown here." Like Judge Baer, Posner subscribes to the judicial inversion of the phrase - using it as a sop to those with security fears, rather than as a reason to curtail liberty. Pundits, Unlike Judges, Tend to Use the "Suicide Pact" Slogan to Defeat Civil Liberties If judges have inverted the "suicide pact" slogan, however, pundit have hewn more closely to Jackson's original meaning. For them, the situation seems always to be so urgent that a compromise with liberty is required. Rather than being assured that the Constitution was not designed as, and thus will not become, a suicide pact, they are constantly worried that without an immediate crackdown, it will soon morph into just such a pact. Academics invoke "suicide pacts" in the law reviews when they want to demonstrate that they are tough-minded about hypothetical conflicts between liberty and security; editorialists do the same. Even Posner-as-pundit falls victim to this thinking, though Posner-as-Judge does not. In a forthcoming book, for example, Posner defends Lincoln's suspension of habeas corpus during the Civil War. Indeed, he even hints that it might have been acceptable for Lincoln to suspend the election of 1864, if the military circumstances had required it, simply because "by November 1864 the North was close to victory." As pundit, Posner advocates "pragmatic" decisionmaking - the balancing of security against liberty - without recognizing that either value has priority. And yet when Posner is sitting as a judge, his strong commitment to the Constitution takes over - despite his desire to appear to be a hard-headed, pragmatic "balancer." Consider, also, the views of Alan Dershowitz who as the ubiquitous pundit would allow torture to, for instance, find the location of a large and lethal "ticking bomb" (as long as a "torture warrant" were issued first). Of course, the problem in real life is how one would ever know that the bomb is really ticking, or that torture would produce reliable information to save the endangered persons. Ironically, Dershowitz's "torture warrant" idea may be wiser than he realizes: If judges' past behavior is a proper guide, they would probably conclude, with Judge Posner, that hypothetically, when "the urgency" is established, they might issue a warrant but "no such urgency has been shown here." Judges Caving to National Security Fears Have Not Relied on the "Suicide Pact" Slogan To be sure, judges have made some very bad decisions in the name of national security. The most notorious of all, of course, was the Korematsu decision, in which the Supreme Court upheld the criminal conviction of a Japanese-American who refused to obey a military order to evacuate a designated region on the West Coast. And just last month in the Jose Padilla case, federal district judge Michael Mukasey rendered an anti-civil liberties decision in the war on terrorism. Mukasey upheld the principle of using administrative detention to confine persons - such as Padilla - whom the Executive has designated, with "some evidence," as "enemy combatants" collaborating with terrorist organizations. Until this decision, we had all thought that the executive could not confine citizens simply on grounds of suspected danger. History has been unkind to the Supreme Court's decision in Korematsu. Few, if any, would be persuaded today that safeguarding the equal rights of Japanese-Americans would have brought us close to national suicide. Similarly, a huge outcry would occur if the government were to create detention camps for Iraqi-Americans now, based on the same reasoning. We can only hope for a similarly contemptuous historical verdict (or an immediate reversal on appeal) on Judge Mukasey's decision in the Padilla case.It would be a wonderful irony if the decision reversing Mukasey's order, by the U.S. Court of Appeals for the Second Circuit, cited the "suicide pact" metaphor - and if it did, as I have explained, the pro-civil liberties usage would follow the modern norm. Fortunately, since Jackson's dissent, our judges have been more committed to constitutional principles than the rhetoric of suicide pacts would indicate - and indeed, have turned that rhetoric upon its head. We can only hope that judges will continue to speak of "suicide pacts" as a sign that they desire to uphold civil liberties in the particular case, not destroy them. George P. Fletcher is Cardozo Professor of Jurisprudence at the Columbia Law School and the author, most recently, of Romantics at War: Glory and Guilt in the Age of Terrorism.

TERMINIELLO v. CITY OF CHICAGO | FindLaw

2017-07-07T08:59:00.001-04:00

TERMINIELLO v. CITY OF CHICAGO | FindLaw

United States Supreme Court

TERMINIELLO V. CITY OF CHICAGO, (1949)

No. 272

Argued: February 1, 1949 Decided: May 16, 1949

Rehearing Denied June 13, 1949.

See 337 U.S. 934 . [ Terminiello v. City of Chicago 337 U.S. 1 (1949) ] [337 U.S. 1 , 2]

Mr. Albert W. Dilling, of Chicago, Ill., for petitioner.

Mr. L. Louis Karton, of Chicago, Ill., for respondent.

Mr. Justice DOUGLAS delivered the opinion of the Court.

Petitioner after jury trial was found guilty of disorderly conduct in violation of a city ordinance of Chicago1 and fined. The case grew out of an address he delivered in an auditorium in Chicago under the auspices of the [337 U.S. 1 , 3] Christian Veterans of America. The meeting commanded considerable public attention. The auditorium was filled to capacity with over eight hundred persons present. Others were turned away. Outside of the auditorium a crowd o about one thousand persons gathered to protest against the meeting. A cordon of policemen was assigned to the meeting to maintain order; but they were not able to prevent several disturbances. The crowd outside was angry and turbulent.

Petitioner in his speech condemned the conduct of the crowd outside and vigorously, if not viciously, criticized various political and racial groups whose activities he denounced as inimical to the nation's welfare.

The trial court charged that 'breach of the peace' consists of any 'misbehavior which violates the public peace and decorum'; and that the 'misbehavior may constitute a breach of the peace if it stirs the public to anger, invites dispute, brings about a condition of unrest, or creates a disturbance, or if it molests the inhabitants in the enjoyment of peace and quiet by arousing alarm.' Petitioner did not take exception to that instruction. But he maintained at all times that the ordinance as applied to his conduct violated his right of free speech under the Federal Constitution, U.S.Const. Amend. 1. The judgment of conviction was affirmed by the Illinois Appellate Court, 332 Ill.App. 17, 74 N.E.2d 45, and by the Illinois Supreme Court. 396 Ill. 41, 71 N.E.2d 2, 400 Ill. 23, 79 N.E.2d 39. The case is here on a petition for certiorari which we granted because of the importance of the question presented.

The argument here has been focused on the issue of whether the content of petitioner's speech was composed of derisive, fighting words, which carried it outside the scope of the constitutional guarantees. See Chaplinsky v. New Hampshire, 315 U.S. 568 ; Cantwell v. Connecticut, 310 U.S. 296, 310 , 906, 128 A.L.R. 1352. We do not reach that question, for there is a preliminary question that is dispositive of the case. [337 U.S. 1 , 4] As we have noted, the statutory words 'breach of the peace' were defined in instructions to the jury to include speech which 'stirs the public to anger, invites dispute, brings about a condition or unrest, or creates a disturbance. * * *' That construction of the ordinance is a ruling on a question of state law that is as binding on us as though the precise words had been written into the ordinance. See Hebert v. Louisiana, 272 U.S. 312, 317 , 104, 48 A.L.R. 1102; Winters v. New York, 333 U.S. 507, 514 , 669.

The vitality of civil and political institutions in our society depends on free discussion. As Chief Justice Hughes wrote in De Jonge v. Oregon, 299 U.S. 353, 365 , 260, it is only through free debate and free exchange of ideas that government remains responsive to the will of the people and peaceful change is effected. The right to speak freely and to promote diversity of ideas and programs is therefore one of the chief distinctions that sets us apart from totalitarian regimes.

Accordingly a function of free speech under our system of government is to invite dispute. It may indeed best serve its high purpose when it induces a condition of unrest, creates dissatisfaction with conditions as they are, or even stirs people to anger. Speech is often provocative and challenging. It may strike at prejudices and preconceptions and have profound unsettling effects as it presses for acceptance of an idea. That is why freedom of speech, though not absolute, Chaplinsky v. New Hampshire, supra, 315 U.S. at pages 571-572, 62 S.Ct. at page 769, is nevertheless protected against censorship or punishment, unless shown likely to roduce a clear and present danger of a serious substantive evil that rises far above public inconvenience, annoyance, or unrest. See Bridges v. California, 314 U.S. 252, 262 , 193, 159 A.L.R. 1346; Craig v. Harney, 331 U.S. 367, 373 , 1253. There is no room under our Constitution for a more restrictive view. For the alternative would lead to standardization of ideas [337 U.S. 1 , 5] either by legislatures, courts, or dominant political or community groups.

The ordinance as construed by the trial court seriously invaded this province. It permitted conviction of petitioner if his speech stirred people to anger, invited public dispute, or brought about a condition of unrest. A conviction resting on any of those grounds may not stand.

The fact that petitioner took no exception to the instruction is immaterial. No exception to the instructions was taken in Stromberg v. California, 283 U.S. 359, 73 A.L.R. 1484. But a judgment of conviction based on a general verdict under a state statute was set aside in that case, because one part of the statute was unconstitutional. The statute had been challenged as unconstitutional and the instruction was framed in its language. The Court held that the attack on the statute as a whole was equally an attack on each of its individual parts. Since the verdict was a general one and did not specify the ground upon which it rested, it could not be sustained. For one part of the statute was unconstitutional and it could not be determined that the defendant was not convicted under that part.

The principle of that case controls this one. As we have said, the gloss which Illinois placed on the ordinance gives it a meaning and application which are conclusive on us. We need not consider whether as construed it is defective in its entirety. As construed and applied it at least contains parts that are unconstitutional. The verdict was a general one; and we do not know on this record but what it may rest on the invalid clauses.

The statute as construed in the charge to the jury was passed on by the Illinois courts and sustained by them over the objection that as so read it violated the Fourteenth Amendment. The fact that the parties did not dispute its construction makes the adjudication no less [337 U.S. 1 , 6] ripe for our review, as the Stromberg decision indicates. We can only take the statute as the state courts read it. From our point of view it is immaterial whether the state law question as to its meaning was controverted or accepted. The pinch of the statute is in its application. It is that question which the petitioner has brought here. To say therefore that the question on this phase of the case is whether the trial judge gave a wrong charge is wholly to misconceive the issue.

But it is said that throughout the appellate proceedings the Illinois courts assumed that the only conduct punishable and punished under the ordinance was conduct constituting 'fighting words.' That emphasizes, however, the importance of the rule of the Stromberg case. Petitioner was not convicted under a statute so narrowly construed. For all anyone knows he was convicted under the parts of the ordinance (as construed) which, for example, make it an offense merely to invite dispute or to bring about a condition of unrest. We cannot avoid that issue by saying that all Illinois did was to measure petitioner's conduct, not the ordinance, against the Constitution. Petitioner raised both points-that his speech was protected by the consTitution; that the inclusion of his speech within the ordinance was a violation of the Constitution. We would, therefore, strain at technicalities to conclude that the constitutionality of the ordinance as construed and applied to petitioner was not before the Illinois courts. The record makes clear that petitioner at all times challenged the constitutionality of the ordinance as construed and applied to him.

Reversed.

Mr. Chief Justice VINSON, dissen ing.

I dissent. The Court today reverses the Supreme Court of Illinois because it discovers in the record one sentence in the trial court's instructions which permitted [337 U.S. 1 , 7] the jury to convict on an unconstitutional basis. The offending sentence had heretofore gone completely undetected. It apparently was not even noticed, much less excepted to, by the petitioner's counsel at the trial. No objection was made to it in the two Illinois appellate tribunals which reviewed the case. Nor was it mentioned in the petition for certiorari or the briefs in this Court. In short, the offending sentence in the charge to the jury was no part of the case until this Court's independent research ferreted it out of a lengthy and somewhat confused record. I think it too plain for argument that a reversal on such a basis does not accord with any principle governing review of state court decisions heretofore announced by this Court. Certainly, Stromberg v. California, 1931, 283 U.S. 359, 73 A.L.R. 1484, as Mr. Justice FRANKFURTER demonstrates, offers no precedent for today's action.

It will not do to say that, because the Illinois appellate courts affirmed the petitioner's conviction in the face of a constitutional attack, they necessarily must have approved the interpretation of the Chicago ordinance contained in the unnoticed instruction. The fact is that the Illinois courts construed the ordinance as punishing only the use of 'fighting words.' Their opinions plainly show that they affirmed because they thought that the petitioner's speech had been found by the jury to come within that category. 1 Their action was not, and cannot here be taken to be, an approval of the ordinance 'as construed' by the instruction because the record clearly shows that the case was treated on appeal, both by counsel and by the courts, as if no such instruction existed. This Court can reverse the conviction because of the instruction only if we are to say that every time a state [337 U.S. 1 , 8] court affirms a conviction it necessarily must approve of every unnoticed and unobjected to error which we may discover in the record. If such is the doctrine of this case, I feel compelled to register my emphatic dissent.

The instruction informed the jury that they could return a verdict of guilty if they found that the petitioner's speech was one which 'stirs the public to anger, invites public dispute, brings about a condition of unrest, or creates a disturbance.' If the petitioner's counsel, who carefully made other constitutional objections throughout the proceedings below, had brought any issue here as to the constitutional validity of that instruction I would agree with the Court's decision. But the record gives me no basis on which to believe that the Illinois courts would not also have so decided if that issue had been presented to them.

The Court, as I understand it, does not reach the issue which the parties argued here-whether a properly instructed jury could constitutionally have found from the conflicting evidence in the record that, under the circumstances, the words in the petitioner's speech were 'fighting words' to those inside the hall who heard them. Certainly, the Court does not decide whether the violent opposition of those outside the hall, who did not hear the speech, could constitutionally warrant the conviction of the petitioner in order to keep the streets from becoming ideological battlegrounds. Since neither of these constitutional issues is decided by the Court, I think that it is not within my province to indicate any opinion concerning them. See Rescue Army v. Municipal Court, 1947, 331 U.S. 549, 568 , 1419.

Mr. Justice FRANKFURTER, dissenting.

For the first time in the course of the 130 years i which State prosecutions have come here for review, this Court is today reversing a sentence imposed by a State court [337 U.S. 1 , 9] on a ground that was urged neither here nor below and that was explicitly disclaimed on behalf of the petitioner at the bar of this Court.

The impropriety of that part of the charge which is now made the basis of reversal was not raised at the trial nor before the Appellate Court of Illinois. The fact that counsel for Terminiello wholly ignored it is emphasized by the objections that he did make in relation to other instructions given and not given. On appeal to the Supreme Court of Illinois, counsel still failed to claim as error that which this Court on its own motion now finds violative of the Constitution. It was not mentioned by the Illinois Supreme Court in its careful opinion disposing of other claims and it was not included in the elaborate petition for rehearing in that court. Thus an objection, not raised by counsel in the Illinois courts, not made the basis of the petition for certiorari here- not included in the 'questions presented,' nor in the 'reasons relied on for the allowance of the writ'-and explicitly disavowed at the bar of this Court, is used to upset a conviction which has been sustained by three courts of Illinois.

Reliance on Stromberg v. California, 283 U.S. 359, 73 A.L.R. 1484, for what is done today is wholly misplaced. Neither expressly nor by implication has that decision any bearing upon the issue which the Court's opinion in this case raises, namely, whether it is open for this Court to reverse the highest court of a State on a point which was not brought before that court, did not enter into the judgment rendered by that court, and at no stage of the proceedings in this Court was invoked as error by the State court whose reversal is here sought. The Stromberg case presented precisely the opposite situation. In that case the claim which here prevailed was a ground of unconstitutionality urged before the California court; upon its rejection by that court it was made the basis of appeal [337 U.S. 1 , 10] to this Court; it was here urged as the decisive ground for the reversal of the California judgment.

The Stromberg case dealt with a statute which proscribed conduct in a threefold way. The information upon which a verdict of guilty was secured was couched in the threefold terms of the statute, and in that form submitted to the jury. A general verdict followed. It was urged throughout the proceedings, and finally at the bar of this Court, that one of the proscriptions of the statute was invalid under the Fourteenth Amendment. That view was sustained. All that the case holds is that where the validity of a statute is successfully assailed as to one of three clauses of a statute and all three clauses were submitted to the jury, the general verdict has an infirmity because it cannot be assumed that the jury convicted on the valid portions of the statute and not on the invalid. There was no question in that case of searching the record for an alleged error that at no time was urged against the State judgment brought here for review.

In the Stromberg case an error that was properly urged was sustained. In this case a claim that was not urged but was disavowed is transmuted into a claim denied.

Only the uninformed will deride as a merely technical point objection to what the Court is doing in this case. The matter touches the very basis of this Court's authority in reviewing the judgments of State courts. We have no authority to meddle with such a judgment unless some claim under the Constitution or the laws of the United States has been made before the State court whose judgment we are reviewing and unless the claim has been denied by that court. 1 How could there have been a [337 U.S. 1 , 11] denial of a federal claim by the Illinois courts, i.e., that the trial judge offended the Constitution of the United States in what he told the jury, when no such claim was made? The relation of the United States and the courts of the United States to the States and the courts of the States is a very delicate matter. It is too delicate to permit silence when a judgment of a State court is reversed in disregard of the duty of this Court to leave untouched an adjudication of a State unless that adjudication is based upon a claim of a federal right which the State has had an opportunity to meet and to recognize. If such a federal claim was neither before the State court nor presented to this Court, this Court unwarrantably strays from its province in looking through the record to find some federal claim that might have been brought to the attention of the State court and, if so, brought, fronted, and that might have been, but was not, urged here. This is a court of review, not a tribunal unbounded by rules. We do not sit like a kadi under a tree dispensing justice according to considerations of individual expediency.

Freedom of speech undoubtedly means freedom to express views that challenge deep-seated, sacred beliefs and to utter sentiments that may provoke resentment. But those indulging in such stuff as that to which this proceeding gave rise are hardly so deserving as to lead this Court to single them out as beneficiaries of the first [337 U.S. 1 , 12] departure from the restrictions that bind this Court in reviewing judgments of State courts. Especially odd is it to bestow such favor not for the sake of life or liberty, but to save a small amount of property-$ 100, the amount of the fine imposed upon the petitioner in a proceeding which is civil, not criminal, under the laws of Illinois, and thus subject only to limited review. City of Chicago v. Terminiello, 400 Ill. 23, 29, 79 N.E.2d 39, 43. This Court has recognized that fines of this nature are not within provisions of the Constitution governing federal criminal prosecutions. See Hepner v. United States, 213 U.S. 103, 27 L.R.A.,N.S., 739, 16 Ann.Cas. 960.

The importance of freedom of speech of course cannot be measured by dollars and cents. A great principle may be at stake, as in the Case of the Ship Money, though the issue arise over the payment of a few shillings' tax. Were the Court to sustain the claim urged throughout these proceedings, in Illinois and here, namely, that a law is unconstitutional when it forbids Terminiello's harangue in the circumstances of its utterance, it would be immaterial that only $100 is involved. But to inject an error into the record in order to avoid the issue on which the case was brought here-for certainly relief from the payment of a fine of $ 100 could not alone have induced this Court to excogitate a defect in the judgment which counsel thoughtfully rejected and which three State courts did not consider-hardly raises the objection to the dignity of such a principle. If the Court refrained from taking phrases out of their environment and finding in them a self-generated objection, it could not be deemed to have approved of them even abstract propositions.

On the merits of the issue reached by the Court I share Mr. Justice JACKSON'S views. For I assume that the Court does not mean to reject, except merely for purposes of this case, the basic principle that guides scrutiny of [337 U.S. 1 , 13] a charge on appeal. I assume, that is, that a charge is not to be deemed a bit of abstraction in a non-existing world; the function which a charge serves is to give practical guidance to a jury in passing on the case that was unfolded before it-the particular circumstances in their particular setting.

Mr. Justice JACKSON and Mr. Justice BURTON join this dissent.

Mr. Justice JACKSON, dissenting.

The Court reverses this conviction by reiterating generalized approbations of freedom of speech with which, in the abstract, no one will disagree. Doubts as to their applicability are lulled by avoidance of more than passing reference to the circumstances of Terminiello's speech and judging it as if he had spoken to persons as dispassionate as empty benches, or like a modern Demosthenes practicing his Philippics on a lonely seashore.

But the local court that tried Terminiello was not indulging in theory. It was dealing with a riot and with a speech that provoked a hostile mob and incited a friendly one, and threatened violence between the two. When the trial judge instructed the jury that it might find Terminiello guilty of inducing a breach of the peace if his behavior stirred the public to anger, invited dispute, brought about unrest, created a disturbance or molested peace and quiet by arousing alarm, he was not speaking of these as harmless or abstract conditions. He was addressing his words to the concrete behavior and specific consequences disclosed by the evidence. He was saying to the jury, in effect, that if this particular speech added fuel to the situation already so inflamed as to threaten to get beyond police control, it could be punished as inducing a breach of peace. When the light of the evidence not recited by the Court is thrown upon the Court's opinion, it discloses that underneath a little issue of [337 U.S. 1 , 14] Terminiello and his hundred-dollar fine lurk some of the most far-reaching constitutional questions that can confront a people who value both liberty and order. This Court seems to regard these as enemies of each other and to be of the view that we must forego order to achieve liberty. So it fixes its eyes on a conception of freedom of speech so rigid as to tolerate no concession to society's need for public order.

An old proverb warns us to take heed lest we 'walk into a well from looking at the stars.' To show why I think the Court is in some danger of doing just that, I must bring these deliberations down to earth by a long recital of facts.

Terminiello, advertised as a Catholic Priest, but revealed at the trial to be under suspension by his Bishop, was brought to Chicago from Birmingham, Alabama, to address a gathering that assembled in response to a call signed by Gerald L. K. Smith, which, among other things, said:

'* * * The same people who hate Father Coughlin hate Father Terminiello. They have persecuted him, hounded him, threatened him, but he has remained unaffected by their anti-Christian campaign against him. You will hear all sorts of reports concerning Father Terminiello. But remember that he is a Priest in good standing and a fearless lover of Christ and America.'

The jury may have considered that this call attempted to capitalize the hatreds this man had stirred and foreshadowed, if it did not intend to invite, the kind of demonstration that followed.

Terminiello's own testimony shows the conditions under which he spoke. So far as material it follows:

[337 U.S. 1 , 15]

'When we got there the pickets were not marching; th y were body to body and covered the sidewalk completely, some on the steps so that we had to form a flying wedge to get through. Police escorted us to the building, and I noticed four or five others there.

'They called us 'God damned Fascists, Nazis, ought to hang the so and sos.' When I entered the building I heard the howls of the people outside . * * * There were four or five plain clothes officers standing at the entrance to the stage and three or four at the entrance to the back door.

'The officers threatened that if they broke the door again they would arrest them and every time they opened the door a little to look out something was thrown at the officers, including ice-picks and rocks.

'A number of times the door was broken, was partly broken through. There were doors open this way and they partly opened and the officers looked out two or three times and each time ice-picks, stones and bottles were thrown at the police at the door. I took my place on the stage, before this I was about ten or fifteen minutes in the body of the hall.

'I saw a number of windows broken by stones or missiles. I saw the back door being forced open, pushed open.

[337 U.S. 1 , 16]

'Between the time the first speaker spoke and I spoke, stones and bricks were thrown in all the time. I started to speak about 35 or 40 minutes after the meeting started, a little later than nine o'clock. * * *'

The court below, in addition to this recital, heard other evidence, that the crowd reached an estimated number of 1,500. Picket lines obstructed and interfered with access to the building. The crowd constituted 'a surging, howling mob hurling epithets at those who would enter and tried to tear their clothes off.' One young woman's coat was torn off and she had to be assisted into the meeting by policemen. Those inside the hall could hear the loud noises and hear those on the outside yell, 'Fascists, Hitlers!' and curse words like 'damn Fascists.' Bricks were thrown through the windowpanes before and during the speaking. About 28 windows were broken. The street was black with people on both sides for at least a block either way; bottles, stink bombs and brickbats were thrown. Police were unable to control the mob, which kept breaking the windows at the meeting hall, drowning out the speaker's voice at times and breaking in through the back door of the auditorium. About 17 of the group outside were arrested by the police.

Knowing of this environment, Terminiello made a long speech, from the stenographic record of which I omit [337 U.S. 1 , 17] relatively innocuous passages and add emphasis of what seems especially provocative:

'Father Terminiello: Now, I am going to whisper my greetings to you, Fellow Christians. I will interpret it. I said, 'Fellow Christians,' and I suppose there are some of the scum got in by mistake, so I want to tell a story about the scum:

'* * * And nothing I could say tonight could begin to express the contempt I have for the slimy scum that got in by mistake.

'* * * The subject I want to talk to you tonight about is the attempt that is going on right outside this hall tonight, the attempt that is going on to destroy America by revolution. * * *

' y friends, it is no longer true that it can't happen here. It is happening here, and it only depends upon you, good people, who are here tonight, depends upon all of us together, as Mr. Smith said. The tide is changing, and if you and I turn and run from that tide, we will all be drowned in this tidal wave of Communism which is going over the world.

'* * * I am not going to talk to you about the menace of Communism, which is already accomplished, in Russia, where from eight to fifteen million people were murdered in cold blood by their own countrymen, and millions more through Eastern Europe at the close of the war are being murdered by these murderous Russians, hurt, being raped and sent into slavery. That is what they want for you, that howling mob outside.

[337 U.S. 1 , 18]

'Now, Russia promised us we would ga (sic) back to the official newspaper of Russia. Primarily it was back about 1929. They quoted the words of George E. Dimitroff, who at that time was the Executive Secretary of the Communist International. I only quote you this one passage. I could quote thousands of paragraphs for you. Let me quote you: 'You worldwide nature of our program is not mere talk, but an all embracing blood-soaked reality.' That is what they want for us, a blood-soaked reality but it was promised to us by the crystal gazers in Washington; and you know what I mean by the 'crystal gazers,' I presume.

'First of all, we had Queen Eleanor. Mr. Smith said, 'Queen Eleanor is now one of the world's communists. She is one who said this-imagine, coming from the spouse of the former President of the United States for twelve long years-this is what she said: 'The war is but a step in the revolution. The war is but one step in the revolution, and we know who started the war.'

[337 U.S. 1 , 19]

'Now, my friends, they are planning another ruse; and if it ever happens to this cou-try (sic), God help America. They are going to try to put into Mr. Edgar Hoover's position a man by the name of George Swarzwald. I think even those who were uneducated on so-called sedition charges, that the majority of the individuals in this department, that Christ-like men and women who realize today what is going on in this country, men who are in this audience today, who want to know the names of those people, before they are outside, they want to know the names if any. Did you hear any tonight that you recognize? Most of them probably are imported. They are imported from Russia, certainly. If you know the names, please send them to me immediately. * * *

[337 U.S. 1 , 20]

'My friends, this moment someone reminded me of the plan to sterilize them. The nurses, they tell me are going to inject diseases in them, syphilis and other diseases in every one that came there all of one race, all non-Christians.

'Now, we are going to get the threats of the people of Argentine, the people of Spain. We have now declared, according to our officials, to have declared Franco to have taken the place of Hitler. Franco was the savior of what was left of Europe.

'Now, let me say, I am going to talk about-I almost said, about the Jews. Of course, I would not want to say that. However, I am going to talk about some Jews. I hope that-I am a Christian minister. We must take a Christian attitude. I don't want you to go from this hall with hatred in your heart for any person, for no person. * * *

'Now, this danger which we face-let us call them Zionist Jews if you will, let's call them atheistic, communistic Jewish or Zionist Jews, then let us not fear to condemn them. You remember the Apostles when they went into the upper room after the death of the Master, they went in there, after locking the doors; they closed the windows. (At this time there was a very loud noise as if something was being thrown into the building.)

[337 U.S. 1 , 21]

'That is why I say to you, men, don't you do it. Walk out of here dignified. The police will protect you. Put the women on the inside, where there will be no hurt to them. Just walk; don't stop and argue. * * * They want to picket our meetings. They don't want us to picket their meetings. It is the same kind of tolerance, if we said there was a bedbug in bed, 'We don't care for you,' or if we looked under the bed and found a snake and said, 'I am going to be tolerant and leave the snake there.' We will not be tolerant of that mob out there. We are not going to be tolerant any longer.

'We are strong enough. We are not going to be tolerant of their smears any longer. We are going to stand up and dare them to smear us.

[337 U.S. 1 , 22]

'There was further discussion to stimulate this offering which was not reported.)'

Such was the speech. Evidence showed that it stirred the audience not only to cheer and applaud but to expressions of immediate anger, unrest and alarm. One called the speaker a 'God damned liar' and was taken out by the police. Another said that 'Jews, niggers and Catholics would have to be gotten rid of.' One response was, 'Yes, the Jews are all killers, murderers. If we don't kill them first, they will kill us.' The anti- Jewish stories elicited exclamations of 'Oh!' and 'Isn't that terrible!' and shouts of 'Yes, send the Jews back to Russia,' 'Kill the Jews,' 'Dirty kikes,' and much more of ugly tenor. This is the specific and concrete kind of anger, unrest and alarm, coupled with that of the mob outside, that the trial court charged the jury might find to be a breach of peace induced by Terminiello. It is difficult to believe that this Court is speaking of the same occasion, but it is the only one involved in this litigation.

Terminiello, of course, disclaims being a fascist. Doubtless many of the indoor audience were not consciously such. His speech, however, followed, with fidelity that is more than coincidental, the pattern of European fascist leaders. [337 U.S. 1 , 23] The street mob, on the other hand, included some who deny being communists, but Terminiello testified and offered to prove that the demonstration was communist-organized and communist-led. He offered literature of left-wing organizations calling members to meet and 'mobilize' for instruction as pickets and exhorting followers: 'All out to fight Fascist Smith.'

As this case declares a nation-wide rule that disables local and state authorities from punishing conduct which produces conflicts of this kind, it is unrealistic not to take account of the nature, methods and objectives of the forces involved. This was not an isolated, spontaneous and unintended collision of political, racial or ideological adversaries. It was a local manifestation of a world-wide and standing conflict between two organized groups of revolutionary fanatics, each of which has imported to this country the strong-arm technique developed in the struggle by which their kind has devastated Europe. Increasingly, American cities have to cope with it. One faction organizes a mass meeting, the other organizes pickets to harass it; each organizes squads to counteract the other's pickets; parade is met with counterparade. Each of these mass demonstrations has the potentiality, and more than a few the purpose, of disorder and violence. This technique appeals not to reason but to fears and mob spirit; each is a show of force designed to bully adversaries and to overawe the indifferent. We need not resort to speculation as to the purposes for which these tactics are calculated nor as to their consequences. Recent European history demonstrates both.

Hitler summed up the strategy of the mass demonstration as used by both fascism and communism: 'We should not work in secret conventicles but in mighty mass demonstrations, and it is not by dagger and poison or pistol that the road can be cleared for the movement but by the conquest of the streets. We must teach the Marxists [337 U.S. 1 , 24] that the future master of the streets is National Socialism, just as it will some day be the master of the state.' (Emphasis supplied.) 1 Nazi Conspiracy & Aggression (GPO, 1946) 204, 2 id. 140, Docs. 2760-PS, 404-PS, from 'Mein Kampf.' First laughed at as an extravagant figure of speech, the battle for the streets became a tragic reality when an organized Sturmabterlung began to give practical effect to its slogan that 'possession of the streets is the key to power in he state.' Ibid., also Doc. 2168-PS.

The present obstacle to mastery of the streets by either radical or reactionary mob movements is not the opposing minority. It is the authority of local governments which represent the free choice of democratic and law-abiding elements, of all shades of opinion but who, whatever their differences, submit them to free elections which register the results of their free discussion. The fascist and communist groups, on the contrary, resort to these terror tactics to confuse, bully and discredit those freely chosen governments. Violent and noisy shows of strength discourage participation of moderates in discussions so fraught with violence and real discussion dries up and disappears. And people lose faith in the democratic process when they see public authority flouted and impotent and begin to think the time has come when they must choose sides in a false and terrible dilemma such as was posed as being at hand by the call for the Terminiello meeting: 'Christian Nationalism or World Communism-Which?'

This drive by totalitarian groups to undermine the prestige and effectiveness of local democratic governments is advanced whenever either of them can win from this Court a ruling which paralyzes the power of these officials. This is such a case. The group of which Terminiello is a part claims that his behavior, because it involved a speech, is above the reach of local authorities. [337 U.S. 1 , 25] If the mild action those authorities have taken is forbidden, it is plain that hereafter there is nothing effective left that they can do. If they can do nothing as to him, they are equally powerless as to rival totalitarian groups. Terminiello's victory today certainly fulfills the most extravagant hopes of both right and left totalitarian groups, who want nothing so much as to paralyze and discredit the only democratic authority and can curb them in their battle for the streets.

I am unable to see the the local authorities have transgressed the Federal Constitution. Illinois imposed no prior censorship or suppression upon Terminiello. On the contrary, its sufferance and protection was all that enabled him to speak. It does not appear that the motive in punishing him is to silence the ideology he expressed as offensive to the State's policy or as untrue, or has any purpose of controlling his thought or its peaceful communication to others. There is no claim that the proceedings against Terminiello are designed to discriminate against him or the faction he represents or the ideas that he bespeaks. There is no indication that the charge against him is a mere pretext to give the semblance of legality to a covert effort to silence him or to prevent his followers or the public from hearing any truth that is in him.

A trial court and jury has found only that in the context of violence and disorder in which it was made, this speech was a provocation to immediate breach of the peace and therefore cannot claim constitutional immunity from punishment. Under the Constitution as it has been understood and applied, at least until most recently, the State was within its powers in taking this action.

Rioting is a substantive evil, which I take it no one will deny that the State and the City have the right and the duty to prevent and punish. Where an offense is [337 U.S. 1 , 26] induced by speech, the Court has laid down and often reiterated a test of the power of the authorities to deal with the speaking as also an offense. 'The question in every case is whether the words used are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress (or the State or City) has a right to prevent.' (Emphasis supplied.) Mr. Justice Holmes in Schenck v. United States, 249 U.S. 47, 52 , 249. No one ventures to contend that the State on the basis of this test, for whatever it may be worth, was not justified in punishing Terminiello. In this case the evidence pro es beyond dispute that danger of rioting and violence in response to the speech was clear, present and immediate. If this Court has not silently abandoned this long standing test and substituted for the purposes of this case an unexpressed but more stringent test, the action of the State would have to be sustained.

Only recently this Court held that a state could punish as a breach of the peace use of epithets such as 'damned racketeer' and 'damned fascists,' addressed to only one person, an official, because likely to provoke the average person to retaliation. But these are mild in comparison to the epithets 'slimy scum,' 'snakes,' 'bedbugs,' and the like, which Terminiello hurled at an already inflamed mob of his adversaries. Mr. Justice Murphy, writing for a unanimous Court in Chaplinsky v. New Hampshire, 315 U.S. 568 , 571-572, 769, said:

[337 U.S. 1 , 27]

310 U.S. 296

In the latter case Mr. Justice Roberts for a unanimous Court also said:

310 U.S. 296, 308

How this present decision, denying state power to punish civilly one who precipitated a public riot involving hundreds of fanatic fighters in a most violent melee, can be squared with those unanimous statements of law, is incomprehensible to me. And the Court recently cited these two statements as indicating that 'The essential rights of the First Amendment in some instances are subject to the elemental need for order without which the guarantees of civil rights to others would be a mock- [337 U.S. 1 , 28] ery.' United Public Workers v. Mitchell, 330 U.S. 75, 95 , 567.

However, these wholesome principles are abandoned today and in their place is substituted a dogma of absolute freedom for irresponsible and provocative utterance which almost completely sterilizes the power of local authorities to keep the peace as against this kind of tactics.

Before giving the First and Fourteenth Amendments to the Constitution this effect, we should recall that our application of the First Amendment to Illinois rests entirely on authority which this Court has voted to itself. The relevant parts of the First Amendment, with emphasis supplied, reads: 'Congress shall make no law * * * abridging the freedom of speech.' This restrains no authority except Congress. Read as literally as some would do, it restrains Congress i terms so absolute that no legislation would be valid if it touched free speech, no matter how obscene, treasonable, defamatory, inciting or provoking. If it seems strange that no express qualifications were inserted in the Amendment, the answer may be that limitations were thought to be implicit in the definition of 'freedom of speech' as then understood. Or it may have been thought unnecessary to delegate to Congress any power over abuses of free speech. The Federal Government was then a new and experimental authority, remote from the people, and it was supposed to deal with a limited class of national problems. Inasmuch as any breaches of peace from abuse of free speech traditionally were punishable by state governments, it was needless to reserve that power in a provision drafted to exclude only Congress from such a field of law-making.

The Fourteenth Amendment forbade states to deny the citizen 'due process of law.' But its terms gave no notice to the people that its adoption would strip their local governments of power to deal with such problems of local [337 U.S. 1 , 29] peace and order as we have here. Nor was it hinted by this Court for over half a century that the Amendment might have any such effect. In 1922, with concurrence of the most liberty-alert Justices of all times-Holmes and Brandeis-this Court declared flatly that the Constitution does not limit the power of the state over free speech. Prudential Insurance Co. v. Cheek, 259 U.S. 530, 543 , 522, 27 A.L.R. 27. In later years the Court shifted this dogma and decreed that the Constitution does this very thing and that state power is bound by the same limitation as Congress. Gitlow v. New York, 268 U.S. 652 . I have no quarrel with this history. See West Virginia State Board of Education v. Barnette, 319 U.S. 624 , 147 A.L.R. 674. I recite the method by which the right to limit the state has been derived only from this Court's own assumption of the power, with never a submission of legislation or amendment into which the people could write any qualification to prevent abuse of this liberty, as bearing upon the restraint I consider as becoming in exercise of self-given and unappealable power.

It is significant that provisions adopted by the people with awareness that they applied to their own states have universally contained qualifying terms. The Constitution of Illinois is representative of the provisions put in nearly all state constitutions and reads (Art. II, 4): 'Every person may freely speak, write and publish on all subjects, being responsible for the abuse of that liberty.' (Emphasis added.) That is what I think is meant by the cryptic phrase 'freedom of speech,' as used in the Federal Compact, and that is the rule I think we should apply to the states.

This absence from the Constitution of any expressed power to deal with abuse of freedom of speech has enabled the Court to soar aloof from any consideration of the abuses which create problems for the states and to indulge in denials of local authority, some of which seem to me improvident in the light of functions which local gov- [337 U.S. 1 , 30] ernments must be relied on to perform for our free society. Quite apart from any other merits or defects, recent decisions have almost completely immunized this battle for the streets from any form of control.

Streets and parks maintained by the public cannot legally be denied to groups 'for the communication of ideas.' Hague v. C.I.O., 307 U.S. 496 ; Jamison v. Texas, 318 U.S. 413 , 671. Cities may not protect their streets from activities which the law has always regarded subject to control, as nuisances. Lovell v. Griffin, 303 U.S. 444 ; Schneider v. State, 308 U.S. 147 . Cities may not protect the streets or even homes of their inhabitants from the aggressions of organized bands operating in large numbers. Douglas . Jeannette, 319 U.S. 157 . As in this case, the facts are set forth fully only in the dissent, 319 U.S. at page 166, 63 S.Ct. at page 882. See also Martin v. Struthers,319 U.S. 141 . Neither a private party nor a public authority can invoke otherwise valid state laws against trespass to exclude from their property groups bent on disseminating propaganda. Marsh v. Alabama, 326 U.S. 501 ; Tucker v. Texas, 326 U.S. 517 . Picketing is largely immunized from control on the ground that it is free speech, Thornhill v. Alabama, 310 U.S. 88 , and police may not regulate sound trucks and loud-speakers, Saia v. New York, 334 U.S. 558 , though the Court finds them an evil that may be prohibited altogether. Kovacs v. Cooper, 336 U.S. 77 . And one-third of the Court has gone further and declared that a position 'that the state may prevent any conduct which induces people to violate the law, or any advocacy of unlawful activity, cannot be squared with the First Amendment. * * *' and it is only we who can decide when the limit is passed. Musser v. Utah, 333 U.S. 95, 102 , 400. Whatever the merits of any one of these decisions in isolation, and there were sound reasons for some of them, it cannot be denied that their cumulative effect has been a sharp handicap on municipal control [337 U.S. 1 , 31] of the streets and a dramatic encouragement of those who would use them in a battle of ideologies.

I do not think we should carry this handicap further, as we do today, but should adhere to the principles heretofore announced to safeguard our liberties against abuse as well as against invasion. It should not be necessary to recall these elementary principles, but it has been a long time since some of them were even mentioned in this Court's writing on the subject and results indicate they may have been overlooked.

I begin with the oft-forgotten principle which this case demonstrates, that freedom of speech exists only under law and not independently of it. What would Terminiello's theoretical freedom of speech have amounted to had he not been given active aid by the officers of the law? He could reach the hall only with this help, could talk only because they restrained the mob, and could make his getaway only under their protection. We would do well to recall the words of Chief Justice Hughes in Cox v. New Hampshire, 312 U.S. 569, 574 , 765, 133 A.L.R. 1396: 'Civil liberties, as guaranteed by the Constitution, imply the existence of an organized society maintaining public order without which liberty itself would be lost in the excesses of unrestrained abuses. * * *'

This case demonstrates also that this Court's service to free speech is essentially negative and can consist only of reviewing actions by local magistrates. But if free speech is to be a practical reality, affirmative and immediate protection is required; and it can come only from nonjudicial sources. It depends on local police, maintained by law-abiding taxpayers, and who, regardless of their own feelings, risk themselves to maintain supremacy of law. Terminiello's theoretical right to speak free from interference would have no reality if Chicago should withdraw its officers to some other section of the city, or if the men assigned to the task should look the other [337 U.S. 1 , 32] way when the crowd threatens Terminiello. Can society by expected to keep these men at Terminiello's service if it has nothing to say of his behavior which may force them into dangerous action?

No one will disagree that the fundamental, permanent and overriding policy of police and courts should be to permit and encourage utmost freedom of utterance. It is the legal right of any American citizen to advocate peaceful adoption of fascism or communism, socialism or capitalism. He may go far in expressing sentiments whether pro- emitic or anti-semitic, pro-negro or anti-negro, pro-Catholic or anti-Catholic. He is legally free to argue for some anti-American system of government to supersede by constitutional methods the one we have. It is our philosophy that the course of government should be controlled by a consensus of the governed. This process of reaching intelligent popular decisions requires free discussion. Hence we should tolerate no law or custom of censorship or suppression.

But we must bear in mind also that no serious outbreak of mob violence, race rioting, lynching or public disorder is likely to get going without help of some speech-making to some mass of people. A street may be filled with men and women and the crowd still not be a mob. Unity of purpose, passion and hatred, which merges the many minds of a crowd into the mindlessness of a mob, almost invariably is supplied by speeches. It is naive, or worse, to teach that oratory with this object or effect is a service to liberty. No mob has ever protected any liberty, even its own, but if not put down it always winds up in an orgy of lawlessness which respects no liberties.

In considering abuse of freedom by provocative utterances it is necessary to observe that the law is more tolerant of discussion than are most individuals or communities. Law is so indifferent to subjects of talk that I think of none that it should close to discussion. Reli- [337 U.S. 1 , 33] gious, social and political topics that in other times or countries have not been open to lawful debate may be freely discussed here.

Because a subject is legally arguable, however, does not mean that public sentiment will be patient of its advocacy at all times and in all manners. So it happens that, while peaceful advocacy of communism or fascism is tolerated by the law, both of these doctrines arouse passionate reactions. A great number of people do not agree that introduction to America of communism or fascism is even debatable. Hence many speeches, such as that of Terminiello, may be legally permissible but may nevertheless in some surrounding, be a menace to peace and order. When conditions show the speaker that this is the case, as it did here, there certainly comes a point beyond which he cannot indulge in provocations to violence without being answerable to society.

Determination of such an issue involves a heavy responsibility. Courts must beware lest they become mere organs of popular intolerance. Not every show of opposition can justify treating a speech as a breach of peace. Neither speakers nor courts are obliged always and in all circumstances to yield to prevailing opinion and feeling. As a people grow in capacity for civilization and liberty their tolerance will grow, and they will endure, if not welcome, discussion even on topics as to which they are committed. They regard convictions as tentative and know that time and events will make their own terms with theories, by whomever and by whatever majorities they are held, and many will be proved wrong. But on our way to this idealistic state of tolerance the police have to deal with men as they are. The crowd mind is never tolerant of any idea which does not conform to its herd opinion. It does not want a tolerant effort at meeting of minds. It does not know the futility of trying to mob an idea. Released from the sense of [337 U.S. 1 , 34] personal responsibility that would restrain even the worst individuals in it if alone and brave with the courage of numbers, both radical and reactionary mobs endanger liberty as well as order. The authorities must control them and they are entitled to place some checks upon those whose behavior or speech calls such mobs into being. When the right of society to freedom from probable violence should prevail over the right of an individual to defy opposing opinion, presents a problem that always tests wisdom and often calls for immediate and vigorous action to preserve public order and safety.

I do not think that the Constitution of the United States denies to the states and t e municipalities power to solve that problem in the light of local conditions, at least so long as danger to public order is not invoked in bad faith, as a cover for censorship or suppression. The preamble declares domestic tranquility as well as liberty to be an object in founding a Federal Government and I do not think the Forefathers were naive in believing both can be fostered by the law.

Certain practical reasons reinforce the legal view that cities and states sould be sustained in the power to keep their streets from becoming the battleground for these hostile ideologies to the destruction and detriment of public order. There is no other power that can do it. Theirs are the only police that are on the spot. The Federal Government has no police force. The Federal Bureau of Investigation is, and should remain, not a police but an investigative service. To date the only federal agency for preserving and restoring order when local authority fails has been the Army. And when the military steps in, the court takes a less liberal view of the rights of the individual and sustains most arbitrary exercises of military power. See Korematsu v. United States, 323 U.S. 214 . Every failure of local authority to deal with riot problems results in a demand for the [337 U.S. 1 , 35] establishment of a federal police or intervention by federal authority. In my opinion, locally established and controlled police can never develop into the menace to general civil liberties that is inherent in a federal police.

The ways in which mob violence may be worked up are subtle and various. Rarely will a speaker directly urge a crowd to lay hands on a victim or class of victims. An effective and safer way is to incite mob action while pretending to deplore it, after the classic example of Antony, and this was not lost on Terminiello. And whether one may be the cause of mob violence by his own personification or advocacy of ideas which a crowd already fears and hates, is not solved merely by going through a transcript of the speech to pick out 'fighting words.' The most insulting words can be neutralized if the speaker will smile when he says them, but a belligerent personality and an aggressive manner may kindle a fight without use of words that in cold type shock us. True judgment will be aided by observation of the individual defendant, as was possible for this jury and trial court but impossible for us.

There are many appeals these days to liberty, often by those who are working for an opportunity to taunt democracy with its stupidity in furnishing them the weapons to destroy it as did Goebbels when he said: 'When democracy granted democratic methods for us in times of opposition, this (Nazi seizure of power) was bound to happen in a democratic system. However, we National Socialists never asserted that we represented a democratic point of view, but we have declared openly that we used democratic methods only in order to gain the power and that, after assuming the power, we would deny to our adversaries without any consideration the means which were granted to us in times of (our) opposition.' 1 Nazi Conspiracy & Aggression (GPO 1946) 202, Docs. 2500-PS, 2412-PS. [337 U.S. 1 , 36] Invocation of constitutional liberties as part of the strategy for overthrowing them presents a dilemma to a free people which may not be soluble by constitutional logic alone.

But I would not be understood as suggesting that the United States can or should meet this dilemma by suppression of free, open and public speaking on the part of any group or ideology. Suppression has never been a successful permanent policy; any surface serenity that it creates is a false security, while conspiratorial forces go underground. My confidence in American institutions and in the sound sense of the American people is such that if with a stroke of the pen I could silence every fascist and communist speaker, I would not do it. For I agree with Woodrow Wilson, who said:

'I have always been among those who b lieved that the greatest freedom of speech was the greatest safety, because if a man is a fool, the best thing to do is to encourage him to advertise the fact by speaking. It cannot be so easily discovered if you allow him to remain silent and look wise, but if you let him speak, the secret is out and the world knows that he is a fool. So it is by the exposure of folly that it is defeated; not by the seclusion of folly, and in this free air of free speech men get into that sort of communication with one another which constitutes the basis of all common achievement.' Address at the Institute of France, Paris, May 10, 1919. 2 Selected Literary and Political Papers and Addresses of Woodrow Wilson (1926) 333.

But if we maintain a general policy of free speaking, we must recognize that its inevitable consequence will be sporadic local outbreaks of violence, for it is the nature of men to be intolerant of attacks upon institutions, personalities and ideas for which they really care. In [337 U.S. 1 , 37] the long run, maintenance of free speech will be more endangered if the population can have no protection from the abuses which lead to violence. No liberty is made more secure by holding that its abuses are inseparable from its enjoyment. We must not forget that it is the free democratic communities that ask us to trust them to maintain peace with liberty and that the factions engaged in this battle are not interested permanently in either. What would it matter to Terminiello if the police batter up some communists or, on the other hand, if the communists batter up some policemen? Either result makes grist for his mill; either would help promote hysteria and the demand for strong-arm methods in dealing with his adversaries. And what, on the other hand, have the communist agitators to lose from a battle with the police?

This Court has gone far toward accepting the doctrine that civil liberty means the removal of all restraints from these crowds and that all local attempts to maintain order are impairments of the liberty of the citizen. The choice is not between order and liberty. It is between liberty with order and anarchy without either. There is danger that, if the Court does not temper its doctrinaire logic with a little practical wisdom, it will convert the constitutional Bill of Rights into a suicide pact.

I would affirm the conviction.

Mr. Justice BURTON joins in this opinion.

Footnotes

[ Footnote 1 ] 'All persons who shall make, aid, countenance, or assist in making any improper noise, riot, disturbance, breach of the peace, or diversion tending to a breach of the peace, within the limits of the city * * * shall be deemed guilty of disorderly conduct, and upon conviction thereof, shall be severally fined not less than one dollar nor more than two hundred dollars for each offense.' 1(1), ch. 193, Rev.Code 1939, City of Chicago.

[ Footnote 1 ] The opinions are reported at 332 Ill.App. 17, 74 N.E.2d 45, and at 400 Ill. 23, 79 N.E.2d 39. See, particularly, 332 Ill.App. at pages 23 and 38, 74 N.E.2d at pages 48 and 54; 400 Ill. at page 33, 79 N.E.2d at page 45.

[ Footnote 1 ] 'Our power of review in this case is limited not only to the question whether a right guaranteed by the Federal Constitution was denied ( Murdock v. City of Memphis, 20 Wall. 590; Haire v. Rice, 204 U.S. 291, 301 ), but to the particular claims duly made below, and denied (Seaboard Air Line Ry. v. Duvall, 225 U.S. 477, 485 , 488). We lack here the power occasionally exercised on review of judgments of lower federal courts to correct in criminal cases vital errors, although the objection was not taken in the trial court. Wiborg v. United States, 163 U.S. 632, 658 , 660, 1197; Clyatt v. United States, 197 U.S. 207, 221 , 222. This is a writ of error to a state court. Because we may not inquire into the errors now alleged I concur in affirming the judgment of the state court.' Concurring opinion of Mr. Justice Brandeis joined by Mr. Justice Holmes in Whitney v. California, 274 U.S. 357, 380 , 650.

United States Supreme Court TERMINIELLO V. CITY OF CHICAGO, (1949) No. 272 Argued: February 1, 1949 Decided: May 16, 1949 Rehearing Denied June 13, 1949. See 337 U.S. 934 . [ Terminiello v. City of Chicago 337 U.S. 1 (1949) ] [337 U.S. 1 , 2] Mr. Albert W. Dilling, of Chicago, Ill., for petitioner. Mr. L. Louis Karton, of Chicago, Ill., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. Petitioner after jury trial was found guilty of disorderly conduct in violation of a city ordinance of Chicago1 and fined. The case grew out of an address he delivered in an auditorium in Chicago under the auspices of the [337 U.S. 1 , 3] Christian Veterans of America. The meeting commanded considerable public attention. The auditorium was filled to capacity with over eight hundred persons present. Others were turned away. Outside of the auditorium a crowd o about one thousand persons gathered to protest against the meeting. A cordon of policemen was assigned to the meeting to maintain order; but they were not able to prevent several disturbances. The crowd outside was angry and turbulent. Petitioner in his speech condemned the conduct of the crowd outside and vigorously, if not viciously, criticized various political and racial groups whose activities he denounced as inimical to the nation's welfare. The trial court charged that 'breach of the peace' consists of any 'misbehavior which violates the public peace and decorum'; and that the 'misbehavior may constitute a breach of the peace if it stirs the public to anger, invites dispute, brings about a condition of unrest, or creates a disturbance, or if it molests the inhabitants in the enjoyment of peace and quiet by arousing alarm.' Petitioner did not take exception to that instruction. But he maintained at all times that the ordinance as applied to his conduct violated his right of free speech under the Federal Constitution, U.S.Const. Amend. 1. The judgment of conviction was affirmed by the Illinois Appellate Court, 332 Ill.App. 17, 74 N.E.2d 45, and by the Illinois Supreme Court. 396 Ill. 41, 71 N.E.2d 2, 400 Ill. 23, 79 N.E.2d 39. The case is here on a petition for certiorari which we granted because of the importance of the question presented. The argument here has been focused on the issue of whether the content of petitioner's speech was composed of derisive, fighting words, which carried it outside the scope of the constitutional guarantees. See Chaplinsky v. New Hampshire, 315 U.S. 568 ; Cantwell v. Connecticut, 310 U.S. 296, 310 , 906, 128 A.L.R. 1352. We do not reach that question, for there is a preliminary question that is dispositive of the case. [337 U.S. 1 , 4] As we have noted, the statutory words 'breach of the peace' were defined in instructions to the jury to include speech which 'stirs the public to anger, invites dispute, brings about a condition or unrest, or creates a disturbance. * * *' That construction of the ordinance is a ruling on a question of state law that is as binding on us as though the precise words had been written into the ordinance. See Hebert v. Louisiana, 272 U.S. 312, 317 , 104, 48 A.L.R. 1102; Winters v. New York, 333 U.S. 507, 514 , 669. The vitality of civil and political institutions in our society depends on free discussion. As Chief Justice Hughes wrote in De Jonge v. Oregon, 299 U.S. 353, 365 , 260, it is only through free debate and free exchange of ideas that government remains responsive to the will of the people and peaceful change is effected. The right to speak freely and to promote diversity of ideas and programs is therefore one of the chief distinctions that sets us apart from totalitarian regimes. Accordingly a function of free speech under our system of government is to invite dispute. It may indeed best serve its high purpose when it induces a condition of unrest, creates dissatisfaction with conditions as they are, or even stirs people to anger. Speech is often provocative and challenging. It may strike at prejudices and preconceptions and have profound unsettling effects as it presses for acceptance of an idea. That is why freedom of speech, though not absolute, Chaplinsky v. New Hampshire, supra, 315 U.S. at pages 571-572, 62 S.Ct. at page 769, is nevertheless protected against censorship or punishment, unless shown likely to roduce a clear and present danger of a serious substantive evil that rises far above public inconvenience, annoyance, or unrest. See Bridges v. California, 314 U.S. 252, 262 , 193, 159 A.L.R. 1346; Craig v. Harney, 331 U.S. 367, 373 , 1253. There is no room under our Constitution for a more restrictive view. For the alternative would lead to standardization of ideas [337 U.S. 1 , 5] either by legislatures, courts, or dominant political or community groups. The ordinance as construed by the trial court seriously invaded this province. It permitted conviction of petitioner if his speech stirred people to anger, invited public dispute, or brought about a condition of unrest. A conviction resting on any of those grounds may not stand. The fact that petitioner took no exception to the instruction is immaterial. No exception to the instructions was taken in Stromberg v. California, 283 U.S. 359, 73 A.L.R. 1484. But a judgment of conviction based on a general verdict under a state statute was set aside in that case, because one part of the statute was unconstitutional. The statute had been challenged as unconstitutional and the instruction was framed in its language. The Court held that the attack on the statute as a whole was equally an attack on each of its individual parts. Since the verdict was a general one and did not specify the ground upon which it rested, it could not be sustained. For one part of the statute was unconstitutional and it could not be determined that the defendant was not convicted under that part. The principle of that case controls this one. As we have said, the gloss which Illinois placed on the ordinance gives it a meaning and application which are conclusive on us. We need not consider whether as construed it is defective in its entirety. As construed and applied it at least contains parts that are unconstitutional. The verdict was a general one; and we do not know on this record but what it may rest on the invalid clauses. The statute as construed in the charge to the jury was passed on by the Illinois courts and sustained by them over the objection that as so read it violated the Fourteenth Amendment. The fact that the parties did not dispute its construction makes the adjudication no less [337 U.S. 1 , 6] ripe for our review, as the Stromberg decision indicates. We can only take the statute as the state courts read it. From our point of view it is immaterial whether the state law question as to its meaning was controverted or accepted. The pinch of the statute is in its application. It is that question which the petitioner has brought here. To say therefore that the question on this phase of the case is whether the trial judge gave a wrong charge is wholly to misconceive the issue. But it is said that throughout the appellate proceedings the Illinois courts assumed that the only conduct punishable and punished under the ordinance was conduct constituting 'fighting words.' That emphasizes, however, the importance of the rule of the Stromberg case. Petitioner was not convicted under a statute so narrowly construed. For all anyone knows he was convicted under the parts of the ordinance (as construed) which, for example, make it an offense merely to invite dispute or to bring about a condition of unrest. We cannot avoid that issue by saying that all Illinois did was to measure petitioner's conduct, not the ordinance, against the Constitution. Petitioner raised both points-that his speech was protected by the consTitution; that the inclusion of his speech within the ordinance was a violation of the Constitution. We would, therefore, strain at technicalities to conclude that the constitutionality of the ordinance as construed and applied to petitioner was not before the Illinois courts. The record makes clear that petitioner at all times challenged the constitutionality of the ordinance as construed and applied to him. Reversed. Mr. Chief Justice VINSON, dissen ing. I dissent. The Court today reverses the Supreme Court of Illinois because it discovers in the record one sentence in the trial court's instructions which permitted [337 U.S. 1 , 7] the jury to convict on an unconstitutional basis. The offending sentence had heretofore gone completely undetected. It apparently was not even noticed, much less excepted to, by the petitioner's counsel at the trial. No objection was made to it in the two Illinois appellate tribunals which reviewed the case. Nor was it mentioned in the petition for certiorari or the briefs in this Court. In short, the offending sentence in the charge to the jury was no part of the case until this Court's independent research ferreted it out of a lengthy and somewhat confused record. I think it too plain for argument that a reversal on such a basis does not accord with any principle governing review of state court decisions heretofore announced by this Court. Certainly, Stromberg v. California, 1931, 283 U.S. 359, 73 A.L.R. 1484, as Mr. Justice FRANKFURTER demonstrates, offers no precedent for today's action. It will not do to say that, because the Illinois appellate courts affirmed the petitioner's conviction in the face of a constitutional attack, they necessarily must have approved the interpretation of the Chicago ordinance contained in the unnoticed instruction. The fact is that the Illinois courts construed the ordinance as punishing only the use of 'fighting words.' Their opinions plainly show that they affirmed because they thought that the petitioner's speech had been found by the jury to come within that category. 1 Their action was not, and cannot here be taken to be, an approval of the ordinance 'as construed' by the instruction because the record clearly shows that the case was treated on appeal, both by counsel and by the courts, as if no such instruction existed. This Court can reverse the conviction because of the instruction only if we are to say that every time a state [337 U.S. 1 , 8] court affirms a conviction it necessarily must approve of every unnoticed and unobjected to error which we may discover in the record. If such is the doctrine of this case, I feel compelled to register my emphatic dissent. The instruction informed the jury that they could return a verdict of guilty if they found that the petitioner's speech was one which 'stirs the public to anger, invites public dispute, brings about a condition of unrest, or creates a disturbance.' If the petitioner's counsel, who carefully made other constitutional objections throughout the proceedings below, had brought any issue here as to the constitutional validity of that instruction I would agree with the Court's decision. But the record gives me no basis on which to believe that the Illinois courts would not also have so decided if that issue had been presented to them. The Court, as I understand it, does not reach the issue which the parties argued here-whether a properly instructed jury could constitutionally have found from the conflicting evidence in the record that, under the circumstances, the words in the petitioner's speech were 'fighting words' to those inside the hall who heard them. Certainly, the Court does not decide whether the violent opposition of those outside the hall, who did not hear the speech, could constitutionally warrant the conviction of the petitioner in order to keep the streets from becoming ideological battlegrounds. Since neither of these constitutional issues is decided by the Court, I think that it is not within my province to indicate any opinion concerning them. See Rescue Army v. Municipal Court, 1947, 331 U.S. 549, 568 , 1419. Mr. Justice FRANKFURTER, dissenting. For the first time in the course of the 130 years i which State prosecutions have come here for review, this Court is today reversing a sentence imposed by a State court [337 U.S. 1 , 9] on a ground that was urged neither here nor below and that was explicitly disclaimed on behalf of the petitioner at the bar of this Court. The impropriety of that part of the charge which is now made the basis of reversal was not raised at the trial nor before the Appellate Court of Illinois. The fact that counsel for Terminiello wholly ignored it is emphasized by the objections that he did make in relation to other instructions given and not given. On appeal to the Supreme Court of Illinois, counsel still failed to claim as error that which this Court on its own motion now finds violative of the Constitution. It was not mentioned by the Illinois Supreme Court in its careful opinion disposing of other claims and it was not included in the elaborate petition for rehearing in that court. Thus an objection, not raised by counsel in the Illinois courts, not made the basis of the petition for certiorari here- not included in the 'questions presented,' nor in the 'reasons relied on for the allowance of the writ'-and explicitly disavowed at the bar of this Court, is used to upset a conviction which has been sustained by three courts of Illinois. Reliance on Stromberg v. California, 283 U.S. 359, 73 A.L.R. 1484, for what is done today is wholly misplaced. Neither expressly nor by implication has that decision any bearing upon the issue which the Court's opinion in this case raises, namely, whether it is open for this Court to reverse the highest court of a State on a point which was not brought before that court, did not enter into the judgment rendered by that court, and at no stage of the proceedings in this Court was invoked as error by the State court whose reversal is here sought. The Stromberg case presented precisely the opposite situation. In that case the claim which here prevailed was a ground of unconstitutionality urged before the California court; upon its rejection by that court it was made the basis of appeal [337 U.S. 1 , 10] to this Court; it was here urged as the decisive ground for the reversal of the California judgment. The Stromberg case dealt with a statute which proscribed conduct in a threefold way. The information upon which a verdict of guilty was secured was couched in the threefold terms of the statute, and in that form submitted to the jury. A general verdict followed. It was urged throughout the proceedings, and finally at the bar of this Court, that one of the proscriptions of the statute was invalid under the Fourteenth Amendment. That view was sustained. All that the case holds is that where the validity of a statute is successfully assailed as to one of three clauses of a statute and all three clauses were submitted to the jury, the general verdict has an infirmity because it cannot be assumed that the jury convicted on the valid portions of the statute and not on the invalid. There was no question in that case of searching the record for an alleged error that at no time was urged against the State judgment brought here for review. In the Stromberg case an error that was properly urged was sustained. In this case a claim that was not urged but was disavowed is transmuted into a claim denied. Only the uninformed will deride as a merely technical point objection to what the Court is doing in this case. The matter touches the very basis of this Court's authority in reviewing the judgments of State courts. We have no authority to meddle with such a judgment unless some claim under the Constitution or the laws of the United States has been made before the State court whose judgment we are reviewing and unless the claim has been denied by that court. 1 How could there have been a [337 U.S. 1 , 11] denial of a federal claim by the Illinois courts, i.e., that the trial judge offended the Constitution of the United States in what he told the jury, when no such claim was made? The relation of the United States and the courts of the United States to the States and the courts of the States is a very delicate matter. It is too delicate to permit silence when a judgment of a State court is reversed in disregard of the duty of this Court to leave untouched an adjudication of a State unless that adjudication is based upon a claim of a federal right which the State has had an opportunity to meet and to recognize. If such a federal claim was neither before the State court nor presented to this Court, this Court unwarrantably strays from its province in looking through the record to find some federal claim that might have been brought to the attention of the State court and, if so, brought, fronted, and that might have been, but was not, urged here. This is a court of review, not a tribunal unbounded by rules. We do not sit like a kadi under a tree dispensing justice according to considerations of individual expediency. Freedom of speech undoubtedly means freedom to express views that challenge deep-seated, sacred beliefs and to utter sentiments that may provoke resentment. But those indulging in such stuff as that to which this proceeding gave rise are hardly so deserving as to lead this Court to single them out as beneficiaries of the first [337 U.S. 1 , 12] departure from the restrictions that bind this Court in reviewing judgments of State courts. Especially odd is it to bestow such favor not for the sake of life or liberty, but to save a small amount of property-$ 100, the amount of the fine imposed upon the petitioner in a proceeding which is civil, not criminal, under the laws of Illinois, and thus subject only to limited review. City of Chicago v. Terminiello, 400 Ill. 23, 29, 79 N.E.2d 39, 43. This Court has recognized that fines of this nature are not within provisions of the Constitution governing federal criminal prosecutions. See Hepner v. United States, 213 U.S. 103, 27 L.R.A.,N.S., 739, 16 Ann.Cas. 960. The importance of freedom of speech of course cannot be measured by dollars and cents. A great principle may be at stake, as in the Case of the Ship Money, though the issue arise over the payment of a few shillings' tax. Were the Court to sustain the claim urged throughout these proceedings, in Illinois and here, namely, that a law is unconstitutional when it forbids Terminiello's harangue in the circumstances of its utterance, it would be immaterial that only $100 is involved. But to inject an error into the record in order to avoid the issue on which the case was brought here-for certainly relief from the payment of a fine of $ 100 could not alone have induced this Court to excogitate a defect in the judgment which counsel thoughtfully rejected and which three State courts did not consider-hardly raises the objection to the dignity of such a principle. If the Court refrained from taking phrases out of their environment and finding in them a self-generated objection, it could not be deemed to have approved of them even abstract propositions. On the merits of the issue reached by the Court I share Mr. Justice JACKSON'S views. For I assume that the Court does not mean to reject, except merely for purposes of this case, the basic principle that guides scrutiny of [337 U.S. 1 , 13] a charge on appeal. I assume, that is, that a charge is not to be deemed a bit of abstraction in a non-existing world; the function which a charge serves is to give practical guidance to a jury in passing on the case that was unfolded before it-the particular circumstances in their particular setting. Mr. Justice JACKSON and Mr. Justice BURTON join this dissent. Mr. Justice JACKSON, dissenting. The Court reverses this conviction by reiterating generalized approbations of freedom of speech with which, in the abstract, no one will disagree. Doubts as to their applicability are lulled by avoidance of more than passing reference to the circumstances of Terminiello's speech and judging it as if he had spoken to persons as dispassionate as empty benches, or like a modern Demosthenes practicing his Philippics on a lonely seashore. But the local court that tried Terminiello was not indulging in theory. It was dealing with a riot and with a speech that provoked a hostile mob and incited a friendly one, and threatened violence between the two. When the trial judge instructed the jury that it might find Terminiello guilty of inducing a breach of the peace if his behavior stirred the public to anger, invited dispute, brought about unrest, created a disturbance or molested peace and quiet by arousing alarm, he was not speaking of these as harmless or abstract conditions. He was addressing his words to the concrete behavior and specific consequences disclosed by the evidence. He was saying to the jury, in effect, that if this particular speech added fuel to the situation already so inflamed as to threaten to get beyond police control, it could be punished as inducing a breach of peace. When the light of the evidence not recited by the Court is thrown upon the Court's opinion, it discloses that underneath a little issue of [337 U.S. 1 , 14] Terminiello and his hundred-dollar fine lurk some of the most far-reaching constitutional questions that can confront a people who value both liberty and order. This Court seems to regard these as enemies of each other and to be of the view that we must forego order to achieve liberty. So it fixes its eyes on a conception of freedom of speech so rigid as to tolerate no concession to society's need for public order. An old proverb warns us to take heed lest we 'walk into a well from looking at the stars.' To show why I think the Court is in some danger of doing just that, I must bring these deliberations down to earth by a long recital of facts. Terminiello, advertised as a Catholic Priest, but revealed at the trial to be under suspension by his Bishop, was brought to Chicago from Birmingham, Alabama, to address a gathering that assembled in response to a call signed by Gerald L. K. Smith, which, among other things, said: '* * * The same people who hate Father Coughlin hate Father Terminiello. They have persecuted him, hounded him, threatened him, but he has remained unaffected by their anti-Christian campaign against him. You will hear all sorts of reports concerning Father Terminiello. But remember that he is a Priest in good standing and a fearless lover of Christ and America.' The jury may have considered that this call attempted to capitalize the hatreds this man had stirred and foreshadowed, if it did not intend to invite, the kind of demonstration that followed. Terminiello's own testimony shows the conditions under which he spoke. So far as material it follows: '* * * We got there (the meeting place) approximately fifteen or twenty minutes past eight. The car stopped at the front entrance. There was a [337 U.S. 1 , 15] crowd of three or four hundred congregated there shouting and cursing and picketing. * * * 'When we got there the pickets were not marching; th y were body to body and covered the sidewalk completely, some on the steps so that we had to form a flying wedge to get through. Police escorted us to the building, and I noticed four or five others there. 'They called us 'God damned Fascists, Nazis, ought to hang the so and sos.' When I entered the building I heard the howls of the people outside . * * * There were four or five plain clothes officers standing at the entrance to the stage and three or four at the entrance to the back door. 'The officers threatened that if they broke the door again they would arrest them and every time they opened the door a little to look out something was thrown at the officers, including ice-picks and rocks. 'A number of times the door was broken, was partly broken through. There were doors open this way and they partly opened and the officers looked out two or three times and each time ice-picks, stones and bottles were thrown at the police at the door. I took my place on the stage, before this I was about ten or fifteen minutes in the body of the hall. 'I saw a number of windows broken by stones or missiles. I saw the back door being forced open, pushed open. 'The front door was broken partly open after the doors were closed. There were about seven people seated on the stage. Smith opened the meeting with prayer, the Pledge of Allegiance to the Flag and singing of America. There were other speakers who spoke before me and before I spoke I heard things happening in the hall and coming from the outside. [337 U.S. 1 , 16] 'I saw rocks being thrown through windows and that continued throughout at least the first half of the meeting, probably longer, and again attempts were made to force the front door, rather the front door was forced partly. The howling continued on the outside, cursing could be heard audibly in the hall at times. Police were rushing in and out of the front door protecting the front door, and there was a general commotion, all kinds of noises and violence-all from the outside. 'Between the time the first speaker spoke and I spoke, stones and bricks were thrown in all the time. I started to speak about 35 or 40 minutes after the meeting started, a little later than nine o'clock. * * *' The court below, in addition to this recital, heard other evidence, that the crowd reached an estimated number of 1,500. Picket lines obstructed and interfered with access to the building. The crowd constituted 'a surging, howling mob hurling epithets at those who would enter and tried to tear their clothes off.' One young woman's coat was torn off and she had to be assisted into the meeting by policemen. Those inside the hall could hear the loud noises and hear those on the outside yell, 'Fascists, Hitlers!' and curse words like 'damn Fascists.' Bricks were thrown through the windowpanes before and during the speaking. About 28 windows were broken. The street was black with people on both sides for at least a block either way; bottles, stink bombs and brickbats were thrown. Police were unable to control the mob, which kept breaking the windows at the meeting hall, drowning out the speaker's voice at times and breaking in through the back door of the auditorium. About 17 of the group outside were arrested by the police. Knowing of this environment, Terminiello made a long speech, from the stenographic record of which I omit [337 U.S. 1 , 17] relatively innocuous passages and add emphasis of what seems especially provocative: 'Father Terminiello: Now, I am going to whisper my greetings to you, Fellow Christians. I will interpret it. I said, 'Fellow Christians,' and I suppose there are some of the scum got in by mistake, so I want to tell a story about the scum: '* * * And nothing I could say tonight could begin to express the contempt I have for the slimy scum that got in by mistake. '* * * The subject I want to talk to you tonight about is the attempt that is going on right outside this hall tonight, the attempt that is going on to destroy America by revolution. * * * ' y friends, it is no longer true that it can't happen here. It is happening here, and it only depends upon you, good people, who are here tonight, depends upon all of us together, as Mr. Smith said. The tide is changing, and if you and I turn and run from that tide, we will all be drowned in this tidal wave of Communism which is going over the world. '* * * I am not going to talk to you about the menace of Communism, which is already accomplished, in Russia, where from eight to fifteen million people were murdered in cold blood by their own countrymen, and millions more through Eastern Europe at the close of the war are being murdered by these murderous Russians, hurt, being raped and sent into slavery. That is what they want for you, that howling mob outside. 'I know I was told one time that my winter quarters were ready for me in Siberia. I was told that. Now, I am talking about the fifty-seven varieties that we have in America, and we have fifty-seven varieties of pinks and reds and pastel shades in this country; and all of it can be traced back to the [337 U.S. 1 , 18] twelve years we spent under the New Deal, because that was the build-up for what is going on in the world today. 'Now, Russia promised us we would ga (sic) back to the official newspaper of Russia. Primarily it was back about 1929. They quoted the words of George E. Dimitroff, who at that time was the Executive Secretary of the Communist International. I only quote you this one passage. I could quote thousands of paragraphs for you. Let me quote you: 'You worldwide nature of our program is not mere talk, but an all embracing blood-soaked reality.' That is what they want for us, a blood-soaked reality but it was promised to us by the crystal gazers in Washington; and you know what I mean by the 'crystal gazers,' I presume. 'First of all, we had Queen Eleanor. Mr. Smith said, 'Queen Eleanor is now one of the world's communists. She is one who said this-imagine, coming from the spouse of the former President of the United States for twelve long years-this is what she said: 'The war is but a step in the revolution. The war is but one step in the revolution, and we know who started the war.' 'Then we have Henry Adolph Wallace, the sixty million job magician. You know we only need fifty-four million jobs in America and everybody would be working. He wants sixty million jobs, because some of the bureaucrats want two jobs apiece. Here he is, what he says about revolution: 'We are in for a profound revolution. Those of us who realize the inevitableness of the revolution, and are anxious that it be gradual and bloodless instead of somewhat bloody. Of course, if necessary, we will have it more bloody.' [337 U.S. 1 , 19] 'And then Chief Justice Stone had this to say: 'A way has been found for the effective suppression of speeches and press and religion, despite constitutional guarantee,'-from the Chief Justice, from the Chief Justice of the United States. 'Now, my friends, they are planning another ruse; and if it ever happens to this cou-try (sic), God help America. They are going to try to put into Mr. Edgar Hoover's position a man by the name of George Swarzwald. I think even those who were uneducated on so-called sedition charges, that the majority of the individuals in this department, that Christ-like men and women who realize today what is going on in this country, men who are in this audience today, who want to know the names of those people, before they are outside, they want to know the names if any. Did you hear any tonight that you recognize? Most of them probably are imported. They are imported from Russia, certainly. If you know the names, please send them to me immediately. * * * '* * * Didn't you ever read the Morgenthau plan for the starvation of little babies and pregnant women in Germany? Whatever could a child that is born have to do with Hitler or anyone else at the beginning of the war? Why should every child in Germany today not live to be more than two or three months of age? Because M rgenthau wants it that way, and so did F.D. R. * * * You will know who is behind it when I tell you the story of a doctor in Akron, Ohio. He boasted to a friend of mine within the last few days, while he was in the service of this country as a doctor, he and others of his kind made it a practice-now, this was not only one man-made it a practice to amputate the limbs of every German they came in contact with when- [337 U.S. 1 , 20] ever they could get away with it; so, that they could never carry a gun. Imagine men of that caliber, sworn to serve this beautiful country of ours, why should we tolerate them? 'My friends, this moment someone reminded me of the plan to sterilize them. The nurses, they tell me are going to inject diseases in them, syphilis and other diseases in every one that came there all of one race, all non-Christians. 'Now, we are going to get the threats of the people of Argentine, the people of Spain. We have now declared, according to our officials, to have declared Franco to have taken the place of Hitler. Franco was the savior of what was left of Europe. 'Now, let me say, I am going to talk about-I almost said, about the Jews. Of course, I would not want to say that. However, I am going to talk about some Jews. I hope that-I am a Christian minister. We must take a Christian attitude. I don't want you to go from this hall with hatred in your heart for any person, for no person. * * * 'Now, this danger which we face-let us call them Zionist Jews if you will, let's call them atheistic, communistic Jewish or Zionist Jews, then let us not fear to condemn them. You remember the Apostles when they went into the upper room after the death of the Master, they went in there, after locking the doors; they closed the windows. (At this time there was a very loud noise as if something was being thrown into the building.) 'Don't be disturbed. That happened by the way, while Mr. Gerald Smith was saying 'Our Father who art in heaven;' (just then a rock went through the window.) Do you wonder they were persecuted in other countries in the world? [337 U.S. 1 , 21] 'You know I have always made a study of the psychology, sociology of mob reaction. It is exemplified out there. Remember there has to be a leader to that mob. He is not out there. He is probably across the street, looking out the window. There must be certain things, money, other things, in order to have successful mob action; there must be rhythm. There must be some to beat a cadence. Those mobs are chanting; that is the caveman's chant. They were trained to do it. They were trained this afternoon. They are being led; there will be violence. 'That is why I say to you, men, don't you do it. Walk out of here dignified. The police will protect you. Put the women on the inside, where there will be no hurt to them. Just walk; don't stop and argue. * * * They want to picket our meetings. They don't want us to picket their meetings. It is the same kind of tolerance, if we said there was a bedbug in bed, 'We don't care for you,' or if we looked under the bed and found a snake and said, 'I am going to be tolerant and leave the snake there.' We will not be tolerant of that mob out there. We are not going to be tolerant any longer. 'We are strong enough. We are not going to be tolerant of their smears any longer. We are going to stand up and dare them to smear us. 'So, my friends, since we spent much time tonight trying to quiet the howling mob, I am going to bring my thoughts to a conclusion, and the conclusion is this. We must all be like the Apostles before the coming of the Holy Ghost. We must not lock ourselves in an upper room for fear of the Jews. I speak of the Communistic Zionistic Jew, and those are not American Jews. We don't want them here; we want them to go back where they came from. [337 U.S. 1 , 22] 'Mr. Smith: I would like to ask that Miss Purcell would please go back to the front of the building and contact the police officer in charge of the detail. We are going to adjourn this meeting i and when Miss Purcell comes back and reports to me that the one in charge of the detail believes it is safe for us to go out on the street. I am sure it is. Sit still. We are not going to have anybody move. If there are any chiselers that want to go, we are going to take up an offering for Father Terminiello. 'There was further discussion to stimulate this offering which was not reported.)' Such was the speech. Evidence showed that it stirred the audience not only to cheer and applaud but to expressions of immediate anger, unrest and alarm. One called the speaker a 'God damned liar' and was taken out by the police. Another said that 'Jews, niggers and Catholics would have to be gotten rid of.' One response was, 'Yes, the Jews are all killers, murderers. If we don't kill them first, they will kill us.' The anti- Jewish stories elicited exclamations of 'Oh!' and 'Isn't that terrible!' and shouts of 'Yes, send the Jews back to Russia,' 'Kill the Jews,' 'Dirty kikes,' and much more of ugly tenor. This is the specific and concrete kind of anger, unrest and alarm, coupled with that of the mob outside, that the trial court charged the jury might find to be a breach of peace induced by Terminiello. It is difficult to believe that this Court is speaking of the same occasion, but it is the only one involved in this litigation. Terminiello, of course, disclaims being a fascist. Doubtless many of the indoor audience were not consciously such. His speech, however, followed, with fidelity that is more than coincidental, the pattern of European fascist leaders. [337 U.S. 1 , 23] The street mob, on the other hand, included some who deny being communists, but Terminiello testified and offered to prove that the demonstration was communist-organized and communist-led. He offered literature of left-wing organizations calling members to meet and 'mobilize' for instruction as pickets and exhorting followers: 'All out to fight Fascist Smith.' As this case declares a nation-wide rule that disables local and state authorities from punishing conduct which produces conflicts of this kind, it is unrealistic not to take account of the nature, methods and objectives of the forces involved. This was not an isolated, spontaneous and unintended collision of political, racial or ideological adversaries. It was a local manifestation of a world-wide and standing conflict between two organized groups of revolutionary fanatics, each of which has imported to this country the strong-arm technique developed in the struggle by which their kind has devastated Europe. Increasingly, American cities have to cope with it. One faction organizes a mass meeting, the other organizes pickets to harass it; each organizes squads to counteract the other's pickets; parade is met with counterparade. Each of these mass demonstrations has the potentiality, and more than a few the purpose, of disorder and violence. This technique appeals not to reason but to fears and mob spirit; each is a show of force designed to bully adversaries and to overawe the indifferent. We need not resort to speculation as to the purposes for which these tactics are calculated nor as to their consequences. Recent European history demonstrates both. Hitler summed up the strategy of the mass demonstration as used by both fascism and communism: 'We should not work in secret conventicles but in mighty mass demonstrations, and it is not by dagger and poison or pistol that the road can be cleared for the movement but by the conquest of the streets. We must teach the Marxists [337 U.S. 1 , 24] that the future master of the streets is National Socialism, just as it will some day be the master of the state.' (Emphasis supplied.) 1 Nazi Conspiracy & Aggression (GPO, 1946) 204, 2 id. 140, Docs. 2760-PS, 404-PS, from 'Mein Kampf.' First laughed at as an extravagant figure of speech, the battle for the streets became a tragic reality when an organized Sturmabterlung began to give practical effect to its slogan that 'possession of the streets is the key to power in he state.' Ibid., also Doc. 2168-PS. The present obstacle to mastery of the streets by either radical or reactionary mob movements is not the opposing minority. It is the authority of local governments which represent the free choice of democratic and law-abiding elements, of all shades of opinion but who, whatever their differences, submit them to free elections which register the results of their free discussion. The fascist and communist groups, on the contrary, resort to these terror tactics to confuse, bully and discredit those freely chosen governments. Violent and noisy shows of strength discourage participation of moderates in discussions so fraught with violence and real discussion dries up and disappears. And people lose faith in the democratic process when they see public authority flouted and impotent and begin to think the time has come when they must choose sides in a false and terrible dilemma such as was posed as being at hand by the call for the Terminiello meeting: 'Christian Nationalism or World Communism-Which?' This drive by totalitarian groups to undermine the prestige and effectiveness of local democratic governments is advanced whenever either of them can win from this Court a ruling which paralyzes the power of these officials. This is such a case. The group of which Terminiello is a part claims that his behavior, because it involved a speech, is above the reach of local authorities. [337 U.S. 1 , 25] If the mild action those authorities have taken is forbidden, it is plain that hereafter there is nothing effective left that they can do. If they can do nothing as to him, they are equally powerless as to rival totalitarian groups. Terminiello's victory today certainly fulfills the most extravagant hopes of both right and left totalitarian groups, who want nothing so much as to paralyze and discredit the only democratic authority and can curb them in their battle for the streets. I am unable to see the the local authorities have transgressed the Federal Constitution. Illinois imposed no prior censorship or suppression upon Terminiello. On the contrary, its sufferance and protection was all that enabled him to speak. It does not appear that the motive in punishing him is to silence the ideology he expressed as offensive to the State's policy or as untrue, or has any purpose of controlling his thought or its peaceful communication to others. There is no claim that the proceedings against Terminiello are designed to discriminate against him or the faction he represents or the ideas that he bespeaks. There is no indication that the charge against him is a mere pretext to give the semblance of legality to a covert effort to silence him or to prevent his followers or the public from hearing any truth that is in him. A trial court and jury has found only that in the context of violence and disorder in which it was made, this speech was a provocation to immediate breach of the peace and therefore cannot claim constitutional immunity from punishment. Under the Constitution as it has been understood and applied, at least until most recently, the State was within its powers in taking this action. Rioting is a substantive evil, which I take it no one will deny that the State and the City have the right and the duty to prevent and punish. Where an offense is [337 U.S. 1 , 26] induced by speech, the Court has laid down and often reiterated a test of the power of the authorities to deal with the speaking as also an offense. 'The question in every case is whether the words used are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress (or the State or City) has a right to prevent.' (Emphasis supplied.) Mr. Justice Holmes in Schenck v. United States, 249 U.S. 47, 52 , 249. No one ventures to contend that the State on the basis of this test, for whatever it may be worth, was not justified in punishing Terminiello. In this case the evidence pro es beyond dispute that danger of rioting and violence in response to the speech was clear, present and immediate. If this Court has not silently abandoned this long standing test and substituted for the purposes of this case an unexpressed but more stringent test, the action of the State would have to be sustained. Only recently this Court held that a state could punish as a breach of the peace use of epithets such as 'damned racketeer' and 'damned fascists,' addressed to only one person, an official, because likely to provoke the average person to retaliation. But these are mild in comparison to the epithets 'slimy scum,' 'snakes,' 'bedbugs,' and the like, which Terminiello hurled at an already inflamed mob of his adversaries. Mr. Justice Murphy, writing for a unanimous Court in Chaplinsky v. New Hampshire, 315 U.S. 568 , 571-572, 769, said: 'There are certain well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the insulting or 'fighting' words-those which by their very utterance inflict injury or tend to incite an immediate breach of the peace. It has been well observed [337 U.S. 1 , 27] that such utterances are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality. 'Resort to epithets or personal abuse is not in any proper sense communication of information or opinion safeguarded by the Constitution, and its punishment as a criminal act would raise no question under that instrument.' Cantwell v. Connecticut, 310 U.S. 296 , 309, 310, 906, 128 A.L.R. 1352.' In the latter case Mr. Justice Roberts for a unanimous Court also said: 'The offense known as breach of the peace embraces a great variety of conduct destroying or menacing public order and tranquility. It includes not only violent acts but acts and words likely to produce violence in others. No one would have the hardihood to suggest that the principle of freedom of speech sanctions incitement to riot or that religious liberty connotes the privilege to exhort others to physical attack upon those belonging to another sect. When clear and present danger of riot, disorder, interference with traffic upon the public streets, or other immediate threat to public safety, peace, or other, appears, the power of the State to prevent or punish is obvious.' 310 U.S. 296, 308 , 905, 128 A.L.R. 1352. How this present decision, denying state power to punish civilly one who precipitated a public riot involving hundreds of fanatic fighters in a most violent melee, can be squared with those unanimous statements of law, is incomprehensible to me. And the Court recently cited these two statements as indicating that 'The essential rights of the First Amendment in some instances are subject to the elemental need for order without which the guarantees of civil rights to others would be a mock- [337 U.S. 1 , 28] ery.' United Public Workers v. Mitchell, 330 U.S. 75, 95 , 567. However, these wholesome principles are abandoned today and in their place is substituted a dogma of absolute freedom for irresponsible and provocative utterance which almost completely sterilizes the power of local authorities to keep the peace as against this kind of tactics. Before giving the First and Fourteenth Amendments to the Constitution this effect, we should recall that our application of the First Amendment to Illinois rests entirely on authority which this Court has voted to itself. The relevant parts of the First Amendment, with emphasis supplied, reads: 'Congress shall make no law * * * abridging the freedom of speech.' This restrains no authority except Congress. Read as literally as some would do, it restrains Congress i terms so absolute that no legislation would be valid if it touched free speech, no matter how obscene, treasonable, defamatory, inciting or provoking. If it seems strange that no express qualifications were inserted in the Amendment, the answer may be that limitations were thought to be implicit in the definition of 'freedom of speech' as then understood. Or it may have been thought unnecessary to delegate to Congress any power over abuses of free speech. The Federal Government was then a new and experimental authority, remote from the people, and it was supposed to deal with a limited class of national problems. Inasmuch as any breaches of peace from abuse of free speech traditionally were punishable by state governments, it was needless to reserve that power in a provision drafted to exclude only Congress from such a field of law-making. The Fourteenth Amendment forbade states to deny the citizen 'due process of law.' But its terms gave no notice to the people that its adoption would strip their local governments of power to deal with such problems of local [337 U.S. 1 , 29] peace and order as we have here. Nor was it hinted by this Court for over half a century that the Amendment might have any such effect. In 1922, with concurrence of the most liberty-alert Justices of all times-Holmes and Brandeis-this Court declared flatly that the Constitution does not limit the power of the state over free speech. Prudential Insurance Co. v. Cheek, 259 U.S. 530, 543 , 522, 27 A.L.R. 27. In later years the Court shifted this dogma and decreed that the Constitution does this very thing and that state power is bound by the same limitation as Congress. Gitlow v. New York, 268 U.S. 652 . I have no quarrel with this history. See West Virginia State Board of Education v. Barnette, 319 U.S. 624 , 147 A.L.R. 674. I recite the method by which the right to limit the state has been derived only from this Court's own assumption of the power, with never a submission of legislation or amendment into which the people could write any qualification to prevent abuse of this liberty, as bearing upon the restraint I consider as becoming in exercise of self-given and unappealable power. It is significant that provisions adopted by the people with awareness that they applied to their own states have universally contained qualifying terms. The Constitution of Illinois is representative of the provisions put in nearly all state constitutions and reads (Art. II, 4): 'Every person may freely speak, write and publish on all subjects, being responsible for the abuse of that liberty.' (Emphasis added.) That is what I think is meant by the cryptic phrase 'freedom of speech,' as used in the Federal Compact, and that is the rule I think we should apply to the states. This absence from the Constitution of any expressed power to deal with abuse of freedom of speech has enabled the Court to soar aloof from any consideration of the abuses which create problems for the states and to indulge in denials of local authority, some of which seem to me improvident in the light of functions which local gov- [337 U.S. 1 , 30] ernments must be relied on to perform for our free society. Quite apart from any other merits or defects, recent decisions have almost completely immunized this battle for the streets from any form of control. Streets and parks maintained by the public cannot legally be denied to groups 'for the communication of ideas.' Hague v. C.I.O., 307 U.S. 496 ; Jamison v. Texas, 318 U.S. 413 , 671. Cities may not protect their streets from activities which the law has always regarded subject to control, as nuisances. Lovell v. Griffin, 303 U.S. 444 ; Schneider v. State, 308 U.S. 147 . Cities may not protect the streets or even homes of their inhabitants from the aggressions of organized bands operating in large numbers. Douglas . Jeannette, 319 U.S. 157 . As in this case, the facts are set forth fully only in the dissent, 319 U.S. at page 166, 63 S.Ct. at page 882. See also Martin v. Struthers, 319 U.S. 141 . Neither a private party nor a public authority can invoke otherwise valid state laws against trespass to exclude from their property groups bent on disseminating propaganda. Marsh v. Alabama, 326 U.S. 501 ; Tucker v. Texas, 326 U.S. 517 . Picketing is largely immunized from control on the ground that it is free speech, Thornhill v. Alabama, 310 U.S. 88 , and police may not regulate sound trucks and loud-speakers, Saia v. New York, 334 U.S. 558 , though the Court finds them an evil that may be prohibited altogether. Kovacs v. Cooper, 336 U.S. 77 . And one-third of the Court has gone further and declared that a position 'that the state may prevent any conduct which induces people to violate the law, or any advocacy of unlawful activity, cannot be squared with the First Amendment. * * *' and it is only we who can decide when the limit is passed. Musser v. Utah, 333 U.S. 95, 102 , 400. Whatever the merits of any one of these decisions in isolation, and there were sound reasons for some of them, it cannot be denied that their cumulative effect has been a sharp handicap on municipal control [337 U.S. 1 , 31] of the streets and a dramatic encouragement of those who would use them in a battle of ideologies. I do not think we should carry this handicap further, as we do today, but should adhere to the principles heretofore announced to safeguard our liberties against abuse as well as against invasion. It should not be necessary to recall these elementary principles, but it has been a long time since some of them were even mentioned in this Court's writing on the subject and results indicate they may have been overlooked. I begin with the oft-forgotten principle which this case demonstrates, that freedom of speech exists only under law and not independently of it. What would Terminiello's theoretical freedom of speech have amounted to had he not been given active aid by the officers of the law? He could reach the hall only with this help, could talk only because they restrained the mob, and could make his getaway only under their protection. We would do well to recall the words of Chief Justice Hughes in Cox v. New Hampshire, 312 U.S. 569, 574 , 765, 133 A.L.R. 1396: 'Civil liberties, as guaranteed by the Constitution, imply the existence of an organized society maintaining public order without which liberty itself would be lost in the excesses of unrestrained abuses. * * *' This case demonstrates also that this Court's service to free speech is essentially negative and can consist only of reviewing actions by local magistrates. But if free speech is to be a practical reality, affirmative and immediate protection is required; and it can come only from nonjudicial sources. It depends on local police, maintained by law-abiding taxpayers, and who, regardless of their own feelings, risk themselves to maintain supremacy of law. Terminiello's theoretical right to speak free from interference would have no reality if Chicago should withdraw its officers to some other section of the city, or if the men assigned to the task should look the other [337 U.S. 1 , 32] way when the crowd threatens Terminiello. Can society by expected to keep these men at Terminiello's service if it has nothing to say of his behavior which may force them into dangerous action? No one will disagree that the fundamental, permanent and overriding policy of police and courts should be to permit and encourage utmost freedom of utterance. It is the legal right of any American citizen to advocate peaceful adoption of fascism or communism, socialism or capitalism. He may go far in expressing sentiments whether pro- emitic or anti-semitic, pro-negro or anti-negro, pro-Catholic or anti-Catholic. He is legally free to argue for some anti-American system of government to supersede by constitutional methods the one we have. It is our philosophy that the course of government should be controlled by a consensus of the governed. This process of reaching intelligent popular decisions requires free discussion. Hence we should tolerate no law or custom of censorship or suppression. But we must bear in mind also that no serious outbreak of mob violence, race rioting, lynching or public disorder is likely to get going without help of some speech-making to some mass of people. A street may be filled with men and women and the crowd still not be a mob. Unity of purpose, passion and hatred, which merges the many minds of a crowd into the mindlessness of a mob, almost invariably is supplied by speeches. It is naive, or worse, to teach that oratory with this object or effect is a service to liberty. No mob has ever protected any liberty, even its own, but if not put down it always winds up in an orgy of lawlessness which respects no liberties. In considering abuse of freedom by provocative utterances it is necessary to observe that the law is more tolerant of discussion than are most individuals or communities. Law is so indifferent to subjects of talk that I think of none that it should close to discussion. Reli- [337 U.S. 1 , 33] gious, social and political topics that in other times or countries have not been open to lawful debate may be freely discussed here. Because a subject is legally arguable, however, does not mean that public sentiment will be patient of its advocacy at all times and in all manners. So it happens that, while peaceful advocacy of communism or fascism is tolerated by the law, both of these doctrines arouse passionate reactions. A great number of people do not agree that introduction to America of communism or fascism is even debatable. Hence many speeches, such as that of Terminiello, may be legally permissible but may nevertheless in some surrounding, be a menace to peace and order. When conditions show the speaker that this is the case, as it did here, there certainly comes a point beyond which he cannot indulge in provocations to violence without being answerable to society. Determination of such an issue involves a heavy responsibility. Courts must beware lest they become mere organs of popular intolerance. Not every show of opposition can justify treating a speech as a breach of peace. Neither speakers nor courts are obliged always and in all circumstances to yield to prevailing opinion and feeling. As a people grow in capacity for civilization and liberty their tolerance will grow, and they will endure, if not welcome, discussion even on topics as to which they are committed. They regard convictions as tentative and know that time and events will make their own terms with theories, by whomever and by whatever majorities they are held, and many will be proved wrong. But on our way to this idealistic state of tolerance the police have to deal with men as they are. The crowd mind is never tolerant of any idea which does not conform to its herd opinion. It does not want a tolerant effort at meeting of minds. It does not know the futility of trying to mob an idea. Released from the sense of [337 U.S. 1 , 34] personal responsibility that would restrain even the worst individuals in it if alone and brave with the courage of numbers, both radical and reactionary mobs endanger liberty as well as order. The authorities must control them and they are entitled to place some checks upon those whose behavior or speech calls such mobs into being. When the right of society to freedom from probable violence should prevail over the right of an individual to defy opposing opinion, presents a problem that always tests wisdom and often calls for immediate and vigorous action to preserve public order and safety. I do not think that the Constitution of the United States denies to the states and t e municipalities power to solve that problem in the light of local conditions, at least so long as danger to public order is not invoked in bad faith, as a cover for censorship or suppression. The preamble declares domestic tranquility as well as liberty to be an object in founding a Federal Government and I do not think the Forefathers were naive in believing both can be fostered by the law. Certain practical reasons reinforce the legal view that cities and states sould be sustained in the power to keep their streets from becoming the battleground for these hostile ideologies to the destruction and detriment of public order. There is no other power that can do it. Theirs are the only police that are on the spot. The Federal Government has no police force. The Federal Bureau of Investigation is, and should remain, not a police but an investigative service. To date the only federal agency for preserving and restoring order when local authority fails has been the Army. And when the military steps in, the court takes a less liberal view of the rights of the individual and sustains most arbitrary exercises of military power. See Korematsu v. United States, 323 U.S. 214 . Every failure of local authority to deal with riot problems results in a demand for the [337 U.S. 1 , 35] establishment of a federal police or intervention by federal authority. In my opinion, locally established and controlled police can never develop into the menace to general civil liberties that is inherent in a federal police. The ways in which mob violence may be worked up are subtle and various. Rarely will a speaker directly urge a crowd to lay hands on a victim or class of victims. An effective and safer way is to incite mob action while pretending to deplore it, after the classic example of Antony, and this was not lost on Terminiello. And whether one may be the cause of mob violence by his own personification or advocacy of ideas which a crowd already fears and hates, is not solved merely by going through a transcript of the speech to pick out 'fighting words.' The most insulting words can be neutralized if the speaker will smile when he says them, but a belligerent personality and an aggressive manner may kindle a fight without use of words that in cold type shock us. True judgment will be aided by observation of the individual defendant, as was possible for this jury and trial court but impossible for us. There are many appeals these days to liberty, often by those who are working for an opportunity to taunt democracy with its stupidity in furnishing them the weapons to destroy it as did Goebbels when he said: 'When democracy granted democratic methods for us in times of opposition, this (Nazi seizure of power) was bound to happen in a democratic system. However, we National Socialists never asserted that we represented a democratic point of view, but we have declared openly that we used democratic methods only in order to gain the power and that, after assuming the power, we would deny to our adversaries without any consideration the means which were granted to us in times of (our) opposition.' 1 Nazi Conspiracy & Aggression (GPO 1946) 202, Docs. 2500-PS, 2412-PS. [337 U.S. 1 , 36] Invocation of constitutional liberties as part of the strategy for overthrowing them presents a dilemma to a free people which may not be soluble by constitutional logic alone. But I would not be understood as suggesting that the United States can or should meet this dilemma by suppression of free, open and public speaking on the part of any group or ideology. Suppression has never been a successful permanent policy; any surface serenity that it creates is a false security, while conspiratorial forces go underground. My confidence in American institutions and in the sound sense of the American people is such that if with a stroke of the pen I could silence every fascist and communist speaker, I would not do it. For I agree with Woodrow Wilson, who said: 'I have always been among those who b lieved that the greatest freedom of speech was the greatest safety, because if a man is a fool, the best thing to do is to encourage him to advertise the fact by speaking. It cannot be so easily discovered if you allow him to remain silent and look wise, but if you let him speak, the secret is out and the world knows that he is a fool. So it is by the exposure of folly that it is defeated; not by the seclusion of folly, and in this free air of free speech men get into that sort of communication with one another which constitutes the basis of all common achievement.' Address at the Institute of France, Paris, May 10, 1919. 2 Selected Literary and Political Papers and Addresses of Woodrow Wilson (1926) 333. But if we maintain a general policy of free speaking, we must recognize that its inevitable consequence will be sporadic local outbreaks of violence, for it is the nature of men to be intolerant of attacks upon institutions, personalities and ideas for which they really care. In [337 U.S. 1 , 37] the long run, maintenance of free speech will be more endangered if the population can have no protection from the abuses which lead to violence. No liberty is made more secure by holding that its abuses are inseparable from its enjoyment. We must not forget that it is the free democratic communities that ask us to trust them to maintain peace with liberty and that the factions engaged in this battle are not interested permanently in either. What would it matter to Terminiello if the police batter up some communists or, on the other hand, if the communists batter up some policemen? Either result makes grist for his mill; either would help promote hysteria and the demand for strong-arm methods in dealing with his adversaries. And what, on the other hand, have the communist agitators to lose from a battle with the police? This Court has gone far toward accepting the doctrine that civil liberty means the removal of all restraints from these crowds and that all local attempts to maintain order are impairments of the liberty of the citizen. The choice is not between order and liberty. It is between liberty with order and anarchy without either. There is danger that, if the Court does not temper its doctrinaire logic with a little practical wisdom, it will convert the constitutional Bill of Rights into a suicide pact. I would affirm the conviction. Mr. Justice BURTON joins in this opinion. Footnotes [ Footnote 1 ] 'All persons who shall make, aid, countenance, or assist in making any improper noise, riot, disturbance, breach of the peace, or diversion tending to a breach of the peace, within the limits of the city * * * shall be deemed guilty of disorderly conduct, and upon conviction thereof, shall be severally fined not less than one dollar nor more than two hundred dollars for each offense.' 1(1), ch. 193, Rev.Code 1939, City of Chicago. [ Footnote 1 ] The opinions are reported at 332 Ill.App. 17, 74 N.E.2d 45, and at 400 Ill. 23, 79 N.E.2d 39. See, particularly, 332 Ill.App. at pages 23 and 38, 74 N.E.2d at pages 48 and 54; 400 Ill. at page 33, 79 N.E.2d at page 45. [ Footnote 1 ] 'Our power of review in this case is limited not only to the question whether a right guaranteed by the Federal Constitution was denied ( Murdock v. City of Memphis, 20 Wall. 590; Haire v. Rice, 204 U.S. 291, 301 ), but to the particular claims duly made below, and denied (Seaboard Air Line Ry. v. Duvall, 225 U.S. 477, 485 , 488). We lack here the power occasionally exercised on review of judgments of lower federal courts to correct in criminal cases vital errors, although the objection was not taken in the trial court. Wiborg v. United States, 163 U.S. 632, 658 , 660, 1197; Clyatt v. United States, 197 U.S. 207, 221 , 222. This is a writ of error to a state court. Because we may not inquire into the errors now alleged I concur in affirming the judgment of the state court.' Concurring opinion of Mr. Justice Brandeis joined by Mr. Justice Holmes in Whitney v. California, 274 U.S. 357, 380 , 650.

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New York Bill Proposes Backdoor on Encrypted Phones

If passed, the bill would require that all smartphones sold and leased in the state of New York as of Jan. 1, 2016 have the capability of being decrypted or unlocked by the manufacturer.

Trudy Knockless, Legaltech News

January 29, 2016 | 0 Comments

Recently, there have been several battles in the encryption debate, which stands to undermine the privacy of consumer devices. The latest is a bill proposed by New York state assemblyman Matthew Titone, which aims to have encryption backdoors added to all smartphones in the state.

The bill was initially introduced in June 2015, months after Apple said it will no longer unlock its devices for the police, even with a search warrant. If passed, the bill which is currently with the consumer affairs committee, would require that all smartphones sold and leased in the state of New York as of Jan. 1, 2016, have the capability of being decrypted or unlocked by the manufacturer.

“Lost cell phones are going to be an easy way for people to get into our lives, and I think putting a backdoor on the cell phone is a bad idea,” Yorgen Edholm, privacy advocate and CEO of private cloud company Accellion, told Legaltech News.

He added, “I think every time law enforcement uses it against the bad guys, the bad guys are going to use it against 100 good guys. I think it’s going to be one to 100 ratio of catastrophic privacy losses compared to maybe making it a little bit easier to catch the criminals, and I don’t think it’s going to be very effective because [the criminals] are going to use more secure methods.”

Smartphone manufacturers could be fined as much as $2,500 per device for failing to comply.

The proposed bill states: “The sale or lease in New York of a smartphone manufactured on or after [Jan. 1, 2016] that is not capable of being decrypted and unlocked by its manufacturer or its operating system provider shall subject the seller or lessor to a civil penalty of two thousand five hundred dollars for each smartphone sold or leased if it is demonstrated that the seller or lessor of the smartphone knew at the time of the sale or lease that the smartphone was not capable of being decrypted and unlocked by its manufacturer or its operating system provider.”

The bill argues that the kind of encryption that is available in iOS 8/9 and the more recent versions of Android may help privacy, but can block access to evidence and "severely hampers" law enforcement.

“The security is always something that scares people much more than the privacy, but it’s much easier to lose privacy than it is to guarantee security,” said Edholm. “Everybody talks about terrorist security, and so far, I haven’t seen any report that [decrypting] cell phones have prevented a terrorism case.”

He added, “There are tons of things that [terrorists] can do to kind of sidestep this and the bad guys will do that and the normal guys are going to get their privacy violated.”

The bill has not yet been voted on by state assembly or senate. However, some experts say that if passed, such a law could lead to New Yorkers buying encrypted phones in another state, which could potentially drive business away from New York retailers.

“Weakening encryption with ‘backdoors’ will only increase cybersecurity risks. Hackers will inevitably find ways to exploit them. In addition, it’s an ineffective security measure because terrorists will simply find other ways to communicate discreetly,” David Jay, president of David Jay's Green Room Studios, told Legaltech News. “Since this would be a New York state law, encrypted devices could be easily purchased in neighboring states and would hurt the New York economy.”

He added, “Since 9/11, we have seen an erosion of our privacy in the name of security. While the issue of terrorism is a valid concern for the American people, the government is using reports of terrorist ‘threats’ as a canard to manipulate the public and justify their actions.”

Apple has expressed opposition to the bill, arguing that it will leave unavoidable gaps in its security, making it easier for hackers to gain access to consumers’ devices, as well as their data.

In fact, in a statement on the company’s privacy website, Apple’s CEO Tim Cook assured consumers that Apple has “never worked with any government agency from any country to create a backdoor in any of our products or services. We have also never allowed access to our servers. And we never will.”

He further stated, “Our commitment to protecting your privacy comes from a deep respect for our customers. We know that your trust doesn’t come easy. That’s why we have and always will work as hard as we can to earn and keep it.”

Titone’s bill supports a previously distributed whitepaper, in which New York District Attorney Cyrus Vance demanded that encryption be outlawed to make law enforcement easier.

The whitepaper suggested that “the federal legislation would provide in substance that any smartphone manufactured, leased, or sold in the U.S. must be able to be unlocked, or its data accessed, by the operating system designer.”

Opposition to the decryption proposal has argued that making devices impregnable to the government lessens the devices’ security, and “thus increase the possibility of a bad actor unlawfully accessing device data.”

Vance said that “the loss of personal security would be minimal,” adding that “there is a cost-benefit analysis to be considered: The loss in personal security that would be occasioned by the proposed statute must be weighed against the gain in societal safety that it would create.”

“The problem with the cell phone is that my whole life is on that phone,” said Yorgen. “When authorities say they will not only be listening to my landline conversation but also my cell phone, that’s my life and I don’t think I’m okay with that.”

He said authorities will argue that they only want access to certain information, but “what I worry about is that now in order to get to my cell phone, and the records of who I talk to, they will also get the record of my banking, my browsing history, and other sensitive information, and that’s what I call my life.”

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Amaya Investigation: New Details, But No Developments

Amaya Trading Investigation: New Details Emerge, But Larger Picture Remains Incomplete

Chris Grove, March 9, 2015 07:34 PDT@OPreport

Contents [show]

The Globe and Mail reported last week that Yoel Altman “has come under the scrutiny” of Quebec’s Autorité des marchés financiers (AMF) during the AMF’s investigation into trading around Amaya’s acquisition of Pokerstars.

Altman is described by the Globe and Mail as a “close friend” of Amaya CEO David Baazov and someone who “wore a number of hats as an outside consultant” to the company. The report notes that “[t]here has been no indication from FINRA or the AMF of any wrongdoing by Mr. Altman”.

The report does not appear to represent any new development, but rather additional information regarding the launch of the AMF inquiry in December 2014.

In addition to the AMF investigation, the Financial Industry Regulatory Authority (FINRA) is also understood to be examining trading in Amaya leading up to the PokerStars acquisition.

Bevy of public information creates high investigative hurdle

Before diving into what we know about the AMF and FINRA investigations, two things are worth noting:

The common characterization of Amaya’s stock having “more than doubled” in advance of the announcement is technically correct but reductionary to the point of being misleading. A more accurate range of the movement driven by the acquisition speculation would be from $8 to $12.
The movement of Amaya’s stock during the period in question can be tracked reasonably tightly to publicly-available information.

The chart below (click for a larger version) illustrates both points. Annotations follow.

April 1: Shares of Amaya – which had been trading in the $7-$9 range in the six months prior – nosedive on weaker-than-expected earnings.
April 16: Amaya begins to pull out from the bottom of $5.81 on news of gaming machine shipments.
May 2: Amaya rallies back above the $7 mark on news of New Jersey lab approvalfor Amaya slot titles.
May 15: Amaya reports reasonably strong earnings for 1Q14. The company also announces new credit facilities that give the company access to some $300mm in funds. Critically, the terms of the new credit provide the lenders with the ability to purchase up to 4 million shares of Amaya at CAD$15 per share – even though the stock is trading at around CAD$8 at the time.
May 16: During an earnings call, Amaya executives make several commentssuggesting a major acquisition is a possibility (more on that below).
May 20: A widely-cited research note suggests that Amaya is considering a significant poker acquisition.
May 23: The first speculation of the PokerStars purchase appears on Stockhouse: “has anyone heard the rumour Amaya may be buying PokerStars.net…someone I know high up at a major brokerage firmy mentioned this to me the other day…could this be what’s behind the sudden move…any thoughts?”
May 24: CalvinAyre.com – a site regarded as well-connected within the global online gambling industry – publishes the first article speculating that Amaya was angling for a PokerStars takeover.
May 26: Amaya publicly addresses the stock surge and acquisition rumors.
June 12: Bloomberg reports that Amaya is “near an agreement” for PokerStars prior to markets closing.
June 12: Amaya announces the PokerStars acquisition after markets close.

Connecting the dots

Looking back at the activity starting with the earnings release on May 15, it’s relatively easy to see how someone paying attention could connect the dots to a major acquisition.

And while those dots may not have led to PokerStars directly, (i) there are only so many major online poker platforms available and, (ii) any major acquisition would reasonably have been expected to spark upward interest in Amaya.

As for those dots: They start on the 15th when Amaya announces that they’ve opened up new credit facilities that brings the total they can draw to north of $300mm.

That’s a large pile of cash for a company whose market cap at the time was something in the neighborhood of $500m.

And part of the financing agreement for the new debt involves Amaya granting the lender 4 million share warrants at CAD$15 – nearly double the price of AYA on the day the debt deal was announced.

On the next day’s earnings call, Amaya executives are asked by two separate analysts about the motivation for amassing such a large war chest. Note that both analysts speak of the acquisition as a given:

Eyal: Okay, good. Obviously, you’ve expanded your capacity. It’s fairly significant, between the amount of cash you have on the books and the actual debt facilities you’ve announced last night. Is there any more you can say outside of just saying it’s strategic acquisitions? It seems like it’s a fairly sizeable amount. You have capacity for north of $300 million of cash at this point.
David Baazov (Amaya CEO): All I’d really comment is the reality is at this time, we are bolstering the balance sheet. Historically, we’ve grown via organic growth as well as via acquisition. As I stated on the call, we are looking at this from a strategic perspective.
[…]
Ralph: Okay. Again, to the extent you can give some color, on the strategic acquisition, are you going to be looking at increasing your footprint in Europe? Is it going to be land-based and/or interactive?
David: I would just say that our focus is interactive and it’s global.
Robert: No, the 4 million warrants that are provided alongside the mezzanine debt.
Daniel Sebag (Amaya CFO): It’s part of the overall return negotiated between the lender and the borrower.

And Baazov’s opening remarks can be read – at least in hindsight – as a clear preview that a major acquisition was in the works:

Finally, yesterday, we announced the debt refinancing, adding additional cash to our balance sheet for working capital and corporate purposes. We believe we are now very well positioned to execute on strategic initiatives, including supporting our organic growth, and we also have the flexibility to capitalize on strategic acquisition opportunities that may arise.
Acquisitions have been an integral part of our strategy since 2011. However, we are selective. At this time, we would really be examining opportunities that would significantly bolster our solutions offering while providing value to our shareholders.
During the first quarter, we announced the hiring of Marlon Goldstein as our new Executive Vice President of Corporate Development and general counsel. Marlon was a principal shareholder in the corporate and securities practice at the international law firm of Greenberg Traurig, where he was co-chair of its gaming practice and was focused on corporate and securities matters, including mergers and acquisitions, securities offerings, and financing transactions.

Connect …

A large amount of ready cash with
A company that has grown almost exclusively through acquisitions, and
A major lender that wants Amaya share warrants at nearly double the current share price

… and it’s not hard for a picture of a transformative acquisition to emerge by May 16 based completely on publicly-available information.

What’s known about FINRA’s Amaya investigation

According to a report in The Globe and Mail on February 10, the Financial Industry Regulatory Authority (FINRA) is interested in what relationship, if any, existed between Amayaand some 300 investors who booked handsome profits following Amaya’s blockbuster acquisitionof PokerStars last summer.

FINRA is not a government agency, but a private self-regulatory body established by the U.S. financial industry.

The Globe and Mail reported that FINRA contacted Amaya in December 2013 with a request for information regarding the company’s connection to a number of investors who took a position in Amaya in advance of the acquisition.

FINRA did not comment for the Globe and Mail story.

The Globe and Mail did not appear to have directly reviewed the request, instead referring to sources who had “read the document” and “people familiar with the request.”

It’s unclear who provided the information to the Globe and Mail and why they chose this point in time – some two months after the request was made – to move the story forward.

The inquiry by FINRA is not directly connected to or coordinated with an ongoing investigation being conducted by Quebec’s AMF, although both are broadly centered around the acquisition of PokerStars.

What’s known about the AMF investigation

The investigation timeline

December 10 (time unknown): Agents from the AMF, accompanied by the RCMP, visit the offices of Amaya, Canaccord Genuity and Manulife Financial. All three offices are searched. AMF officials reportedly requested and received a list of trading activity from Canaccord.
December 11, 7:13 PM EST: Forbes publishes the first known report of the incident. This report became the primary source for most subsequent reporting.
December 11, 10:47 EST: Amaya releases a statement on the Forbes report.
February 11: The Globe and Mail reports that the AMF is “examining the trading activities of the Manulife brokers and their family members at the branch in Dorval, which is west of Montreal.”
February 17: The Globe and Mail reports that an alert from Manulife to the AMF about trading in Amaya by a group of Manulife brokers is “believed to have prompted the AMF” to launch the investigation.
March 6: The Globe and Mail reports that the warrant served to Amaya by the AMF in December “included a request for records of communications and business dealings with the company’s long-time adviser Yoel Altman,” citing “people familiar with the investigation” and noting that “[t]here has been no indication from FINRA or the AMF of any wrongdoing by Mr. Altman or the other investors.”

Public statements from Amaya and other relevant parties

Amaya statements

Statement released following the Forbes report

“To provide clarification on a media report, Amaya Inc. (the “Corporation”) (TSX: AYA) confirmed that the Corporation and its officers are cooperating with the Autorité des marchés financiers, the securities regulatory authority in the Province of Quebec (the “AMF”), in an investigation with regards to trading activities in Amaya securities surrounding the Corporation’s acquisition of Oldford Group in 2014. (Dec 11)

To the Corporation’s knowledge, this does not involve any allegations of wrongdoing by the Corporation. Amaya will continue to cooperate, if and as requested, consistent with our practice to always cooperate with regulatory authorities.

The Corporation will continue to monitor the investigation if and as it proceeds. The investigation has had no impact on Amaya’s business operations, employees or companies.” (Dec 11)

Original statement to Forbes from Amaya spokesperson Eric Hollreiser

“Amaya is cooperating in an investigation by the Autorité des Marchés financiers (AMF), the securities regulatory authority in the Province of Quebec. It is not appropriate for us to provide any further details at this time.” (Dec 11)

Comments from CEO David Baazov

“I would say that the investigation for us is something that we anticipated given that there was a historical stock run-up in advance. I think the AMF is looking into something that they should be looking into and looking into what has led to that stock run-up,” Baazov said.

“We have no evidence to believe that there’s any wrongdoing by any officer, director, or employees and we’re cooperating with the investigation.” (BNN, Jan 17)

Intertain statement

“Intertain Group Limited (“IT-T”, “Intertain” or the “Company”) feels it is necessary to comment on the trading activity in its common shares today. The Company became aware through news reports of the investigation by the Autorité des marchés financiers (AMF), Quebec’s securities regulatory authority, regarding certain trading activities of Amaya Gaming Group Inc. Intertain stated today that it is not aware of any connections to Intertain of the investigation and it has not been contacted by any security regulatory or law enforcement authority.” (Dec 12)

Statement from Manulife Financial

“We are aware of the actions taken yesterday by the AMF and RCMP and are fully cooperating with this investigation.” (Forbes, Dec 11).

Statement from Canaccord

“We’re cooperating fully with the routine request for information.” – Canaccord spokesperson Scott Davidson (Star, Dec 12).

“I can assure you that Canaccord Genuity is not the subject of this investigation, nor is any member of our capital markets group […] This is strictly a request for information related to individual trades in our client accounts.” – Chief Executive Officer Paul Reynolds (Montreal Gazette, Dec 15).

Statement from the AMF

“Yesterday’s operation is part of a AMF investigation on that company. I can’t go further for the moment.” – AMF spokesperson Sylvain Théberge (Forbes, Dec 11).

“This search was part of a wider investigation on which we have no further comment,” – AMF spokesperson Sylvain Théberge (La Presse, Dec 12).

When is a raid not a raid?

The Forbes story (and Forbes’ subsequent follow up) both originally referred to the action as a “raid.”

But that description was subsequently removed from both stories, replaced by “showed up” and “investigation.”

That change, along with the gaps between the event and the first report and that report and Amaya’s statement, all suggest a far less aggressive action on the part of authorities than “raid” might bring to mind for the typical reader.

A source inside Canaccord characterized the action as “fairly routine” and a part of “almost every major transaction” to BNN reporter Amber Kanwar.

As for the presence of the RCMP, the agency told the Toronto Star that “it simply provided security for the AMF, rejecting the characterization of its involvement as a raid.”

Immediate impact on stock prices

Amaya stock plummeted on news. On the day following the news (Dec 13), Amaya openeddown sharply, followed by a quick – but only partial – recovery. As of close on Dec 13, the stock was off some 18% from the day’s opening price.

Intertain shares tumbled in tandem. Intertain was not named in connection with the investigation.

But the company – part-owned by Amaya – saw its stock price shrink over 25%, apparently in reaction to the news. Manulife also holds a significant position in Intertain.

Intertain subsequently released a statement saying in part that “it is not aware of any connections to Intertain of the investigation and it has not been contacted by any security regulatory or law enforcement authority.”

Canaccord, Manulife took smaller dips. Canaccord shaved off nearly 16% on the news, while Manulife dipped down just under 3%.

Patrick Horan of Agilith Capital told Advisor.ca that “I don’t think there’s a lot at risk for either company,” reasoning that a few individuals within the companies will be the ultimate targets of investigators.

Connections between the companies

How are Amaya and Canaccord connected? Canaccord played a number of roles in Amaya’s purchase of PokerStars.

How are Amaya and Manulife connected? As of Sept 30, 2014, Manulife owned a ~.6% stake in Amaya.

Both Manulife and Amaya hold material positions in Intertain.

How are Manulife and Canaccord connected? William J Eeuwes, Senior Vice President and Global Head, Private Equity at Manulife, is on the Board of Directors at Canaccord.

Chris Grove - Chris is the publisher of OnlinePokerReport.com. Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.

Tracks And California Online Poker: A Conflict With No Compromise?

2015-03-10T13:42:00.001-04:00

Tracks And California Online Poker: A Conflict With No Compromise?

The Role Of Race Tracks In California Online Poker: A Conflict Without A Compromise?

Dave Palermo, March 10, 2015 06:48 PDT@davepalermo4

A coalition of politically powerful American Indian tribes is taking a hard line against iPoker legislation in California that would license racing associations, wary it would constitute an erosion of the tribes’ constitutionally guaranteed exclusivity to engage in casino gambling.

Seven tribes led by the Pechanga Band of Luiseño Indians of Temecula are standing firm against any online poker bill that would license tracks, contending publicly that it would violate voter-approved public policy against expanded gambling in California.

But on a private, esoteric level, Indian leaders are concerned about the long-term sustainability of tribal gambling, which in California and elsewhere is used to fund government programs.

They view any potential erosion of the constitutionally guaranteed exclusivity tribes have to engage in casino gambling as a threat to tribal governance and self-determination.

It’s an issue not confronted by state officials and commercial stakeholders in the iPoker debate.

For many tribes, caution is the watchword

“Tribes should be careful not to sell out to corporate interests,” Pechanga Chairman Mark Macarro said. “They need to evaluate things in regard to what is best for their tribe and, at the same time, what is best for Indian country.

“Does the proposal sell out principles that to tribes are important? There are certain things we should look out for. It can’t just be about the deal. Certain things shouldn’t be negotiated.”

Macarro’s sentiments are apparently shared by six other tribes in the coalition:

Agua Caliente Band of Cahuilla Indians in Palm Springs
Barona Band of Mission Indians in Lakeside
Lytton Band of Pomo Indians near San Francisco
Sycuan Band of the Kumeyaay Nation in San Diego
Viejas Band of Kumeyaay Indians of Alpine
Yocha Dehe Wintun Nation near Sacramento

They do not see card room involvement in online poker as a threat to tribal casino exclusivity. The California card room industry dates back a century, long before compacted tribal gambling.

Split on tracks fundamentally threatens online poker efforts

Consensus among tribes is considered crucial to getting iPoker legalized in California. And the depth of the concern tribes have on the tracks may very well spell defeat for an online poker bill that will require a 2/3rds vote of the legislature.

“No iPoker in California is the clearly preferable option” to legislation licensing tracks, Agua Caliente Chairman Jeff Grubbe said.

Pechanga counsel Steve Bodmer issued a similar warning at last week’s iGaming Legislative Symposium in Sacramento.

“If you’re prioritizing … racetracks being involved is much more problematic for my client as well as numerous other tribes we work with,” Bodmer said. “This is a big issue because it’s an unnecessary expansion of gaming in California.

“Are we making a principled decision or are we making a business decision?”

The Pechanga coalition has the political clout to block iPoker legislation.

“Without Pechanga, there will be no bill,” a state official who requested anonymity toldPechanga.net.

The view from the other side

One should be careful not to suggest other tribal leaders in partnership with online vendors and anxious to launch poker websites are any less concerned with the future sustainability of their indigenous communities.

Several tribes see the Internet as an important and urgent step in the evolution of tribal gambling. And many tribes view extending licenses to the thoroughbred racing industry as a necessary political step in getting online poker out of the California legislature.

No tribal leader cares more about the well-being of his citizens than Bo Mazzetti, chairman of theRincon Band of Luiseño Indians, partners with Caesars Entertainment.

The same can be said of Robert Martin and Lynn Valbuena, leaders of the Morongo and San Manuel bands of mission Indians, who are partners with Amaya/PokerStars.

Mazzetti, Martin, Valbuena and others do not believe licensing tracks as a threat to the future prosperity of their communities.

“There’s no question the race tracks have to be eligible for licensing,” Mazzetti said. “That’s from the governor’s office. It’s going to be in there or there’s no bill.”

And Martin warns it is not likely all tribes would reach consensus on bill language.

“All of the tribes are not going to get together,” Martin said. “It just is not going to happen.”

Where it goes from here

There are four iPoker bills pending in the state Legislature.

Assemblyman Mike Gatto’s AB9 limits licenses to tribes and card rooms.

Assemblyman Reginald Jones-Sawyer’s AB167 extends license eligibility to the tracks.

Identical “shell” bills sponsored by Assemblyman Adam Gray and Senator Isadore Hall, chairmen of Government Organization committees through which a bill must pass, do not address license eligibility.

Proponents are right to point out that online poker is a state asset and a commercial venture to be taxed and regulated by the state. It is not gambling under the Indian Gaming Regulatory Act.

But if an online poker bill comes out of the legislative cycle which ends in 2016, lawmakers will have to convince tribal leaders the future sustainability of their communities will not be sacrificed to the cause.

That may not be easy.

Image credit: Cheryl Ann Quigley / Shutterstock.com.

Dave Palermo - Dave Palermo is an award-winning metropolitan newspaper reporter. He has written about American Indian governments for more than 20 years, working as an advocate for several tribes and tribal associations. He also has co-authored books on gambling and gambling law.

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Caesars Largest Unit to File Own Chapter 11 Bankruptcy - WSJ

2015-01-14T15:33:00.001-05:00

Caesars Largest Unit to File Own Chapter 11 Bankruptcy - WSJ

MATT JARZEMSKY,

PEG BRICKLEY and

KATE O’KEEFFE

Updated Jan. 13, 2015 8:44 p.m. ET

5 COMMENTS

Caesars Entertainment Corp. ’s largest unit is preparing to file for bankruptcy protection as soon as Thursday, the final gambit of a yearslong attempt to salvage a soured buyout.

Caesars Entertainment Operating Co.’s Chapter 11 filing would launch the final stage ofApollo Global Management LLC’s effort to save some of its $1.7 billion investment in the company, which it took private in 2008 with fellow buyout firm TPG.

A Chapter 11 petition would follow months of contentious negotiations with creditors, a who’s who of Wall Street investors. The unit’s collection of casinos and hotels, including much of the Las Vegas Strip’s iconic Caesars Palace, is expected to operate normally as it works to persuade a judge to approve a restructuring plan that would transform it into a real-estate investment trust.

Caesars Hobbled by Absence in Asia

Eric Seiler, an attorney for the gambling company, told a Delaware corporate law judge Tuesday that Caesars Entertainment Operating Co. would file for bankruptcy “on or about” Thursday. Another person close to the company said it’s possible the filing could come as late as Tuesday, Jan. 20. Mr. Seiler’s comments came after a group of creditors sought Monday to force the unit into bankruptcy through an involuntary Chapter 11 petition. It isn’t clear where the unit will file bankruptcy papers.

But in an unusual move later Tuesday, Appaloosa Management, Tennenbaum Capital Partners LLC and Oaktree Capital Management asked the Delaware bankruptcy court to prevent the unit from filing for Chapter 11 elsewhere while the involuntary petition is pending there.

The restructuring is likely to test how far an owner can go to protect its own interest in bankruptcy. In recent years, Apollo has engineered a series of aggressive financial moves that have positioned the buyout firm to keep a significant stake in the gambling empire even though many creditors aren’t in line for a full repayment.

Some creditors have already challenged those transactions in court, an indication that Apollo may yet be in for a fight despite reaching a restructuring deal with most of the unit’s senior bondholders.

Bankruptcy isn’t the outcome Apollo and TPG had in mind in late 2006 when they teamed up to buy the casino giant, then known as Harrah’s Entertainment Inc. That year, the Las Vegas Strip and Atlantic City—major hubs for the casino operator—shattered prior gambling revenue records.

“Harrah’s has an excellent brand name, strong cash flows, an impressive portfolio of properties, a very talented management team, and highly skilled employees,” Apollo co-founder and Chief Executive Leon Black said in announcing the deal.

But the world changed by the time the buyout closed in January 2008. Consumers began cutting back on spending as the U.S. financial crisis took hold, and the company’s $22 billion post-buyout debt load quickly became a bigger burden than its buyers had anticipated.

Caesars also encountered another problem: Its efforts to secure a gambling license in Macau failed. Over the past decade, the Chinese territory has become the world’s biggest gambling market, with seven times the revenue of the Las Vegas Strip. Though the financial crisis took a toll on rivals MGM Resorts International, Wynn Resorts Ltd. and Las Vegas Sands Corp., revenue from Macau operations has revived their balance sheets.

Meanwhile, Caesars’ debt has limited any expansion to modest projects unlikely to contribute much to its bottom line. And one place where Caesars had been dominant—Atlantic City—went into freefall last year, forcing a handful of casinos to close, including Caesars’ Showboat.

Though Caesars remains one of the biggest names in gambling, its casino operations have taken a backseat to its financial woes on quarterly earnings calls. An analyst joked about the situation on a March 2014 call when he requested to ask an operational question “because you guys do run casinos.” Chief Executive Gary Loveman replied: “It’s flattering that you noticed that.”

The parent company has posted losses for each of the last four years, and its total liabilities have climbed to $28.2 billion.

Most of the debt stemming from the buyout is concentrated in Caesars Entertainment Operating Co., the unit expected to file for Chapter 11 protection. In recent years, its owners transferred properties, such as Caesars Palace’s upscale Octavius Tower, to other entities controlled by the parent company.

Some creditors have said these transfers moved valuable assets out of their reach. This past November, a trustee representing senior bondholders filed a lawsuit in Delaware’s Court of Chancery alleging that the assets transferred out of the unit were worth at least $3.6 billion more than the unit received for them.

Caesars and Apollo have defended the moves. Apollo defends its companies “using all the tools available to us,” Apollo spokesman Charles V. Zehren said earlier this month.

Apollo’s maneuvering led to sometimes bitter negotiations with some of the world’s most experienced distressed-debt investors, including Blackstone Group LP’s GSO Capital Partners, Elliott Management Corp., Oaktree and Appaloosa.

Their disputes occasionally spilled into public view. In the November lawsuit, the trustee for the senior bondholders called the Caesars transfers “a case of unimaginably brazen corporate looting.”

Though the unit’s senior lenders still haven’t agreed to back the restructuring, Caesars managed to win the support of its senior bondholders. Senior creditors are slated to get an ownership stake in the new REIT created in the restructuring, along with a mixture of cash and new debt.

Junior bondholders, meanwhile, are slated to recover far less than the senior creditors. A group of these creditors sent a strong signal of their displeasure with the deal earlier in the week when they asked a judge to force the unit into bankruptcy through an involuntary Chapter 11 petition.

On Tuesday, Mr. Seiler, a lawyer for Caesars with Friedman Kaplan Seiler & Adelman LLP, said the involuntary petition wouldn’t set the company’s agenda.

A Caesars Entertainment Operating Co. filing would stand out amid a slow period for mega bankruptcies, during which ultralow interest rates have enabled even the riskiest companies to borrow. It would be the largest bankruptcy since Energy Future Holdings Corp., another boom-era buyout formerly known as TXU, sought Chapter 11 protection last April.

The filing comes at the tail end of a shakeout among the multibillion-dollar buyouts that preceded the financial crisis. Some, including silicone and quartz producer Momentive Performance Materials Inc. and textbook publisher Cengage Learning Inc., ended up in bankruptcy court. Others, like real-estate brokerage owner Realogy Holdings Corp. and hotel giant Hilton Worldwide Holdings Inc., weathered the downturn and generated profits for their owners.

If the restructuring goes as planned for Caesars’s owners, Apollo and TPG will keep a stake in the parent company, allowing them to share in the upside if its fortunes improve.

Corrections & Amplifications

An analyst joked during a March 2014 earnings call about the way questions related to Caesars Entertainment’s casino operations had taken a backseat to those about its financial woes. An earlier version of this article reported incorrectly that the call occurred in November.

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Casino Gambling in Georgia - Should Casino Gambling Be Made Legal in Georgia? - Pinoy Magazine

2014-12-26T12:31:00.001-05:00

Casino Gambling in Georgia - Should Casino Gambling Be Made Legal in Georgia? - Pinoy Magazine

Casino Gambling in Georgia – Should Casino Gambling Be Made Legal in Georgia?

Gaming

Dec 25, 2014

0 191

The State of Georgia is facing a budget shortfall for fiscal 2009 of over $2 Billion. And states do not have the luxury of running deficit spending, and printing up paper money to cover the shortfall. State budgets must be balanced each year. So, Georgia needs to give serious consideration to a new revenue stream.

State Rep. Roger Bruce (D-Atlanta) has announced his intention to introduce a bill in the 2009 legislative session to allow voters to decide if they want gaming in Georgia. His bill would allow voters of each Georgia county to decide whether or not they wanted gaming in their county. The Georgia Assembly and recent governors have been cool to the idea of casinos in Georgia. But the legislature has never allowed any gaming proposal to be voted on in a general referendum or any other popular vote.

The big question is: Should gambling be made legal in the state of Georgia?

Answer Number One: In a free society, individuals are free to use their income and assets whichever way they choose. There should be no moral, ethical, or even Biblical sanction against gambling. Some people believe that gambling is a sin, but a sin should not be made illegal when it does not initiate force or fraud against another individual. Said another way, if I use my money to gamble with, it’s my business.

Answer Number Two: The State legislators have already settled any moral trepidations they may have ever had over gambling. It is already legal here in Georgia in one form. Fifteen years ago, lottery gambling became legal in Georgia, and to date, has generated over $15 Billion in tax revenue. Sales for fiscal year 2008 climbed to a record-breaking $3.5 billion, exceeding the revenue generated during fiscal year 2007. So, the State of Georgia has already been in the gaming business for over 15 years. Casino gambling is simply another form of gambling. However, with casino gambling, the state will not have the monopoly, but private enterprise will own and operate the casinos.

With a 15-year history of successful gaming under its belt, it is going to be pretty hard for the Georgia General Assembly to refuse casino gambling without exhibiting massive hypocrisy. But massive hypocrisy has not stopped them in the past.

But, what about other states where gaming is legal? What has their experience been?

To find out, I went to the website of the American Gaming Association in Washington, DC.

In Nevada, the granddaddy of them all, where gaming began in 1931, tax revenues from gaming have been a large part of the state budget. In 2006, Nevada gaming had 201,000 employees and tax revenues were $1.034 Billion. Nevada’s budget for 2009 is set at $6 Billion, so gaming revenue comprises about 17% of that state’s total income each year.

Mississippi legalized gaming in 1990, passed by legislation and local option vote. There are 30,500 gaming employees, and tax revenue for 2006 was $350.44 Million.

Louisiana legalized gambling in 1993, passed by legislation and local option vote. Tax revenue last year was $559 million, another $68 million from racetrack casinos, with 20,300 gaming employees.

Michigan legalized gambling in 1996 by statewide referendum, local option vote and legislation. Michigan has 3 casinos that generated 2006 tax revenue of $365 million.

So we see here that other states have long histories of success with casino gambling.

Casino gambling would be a welcome addition to the convention business in Atlanta and other Georgia cities. Las Vegas has been stealing away convention business for years now with their gaming and entertainment attractions. The Georgia hospitality and restaurant industries would also get an infusion of business as they support gaming tourism.

Atlanta has another competitive advantage as a gaming destination…Hartsfield-Jackson Airport, the busiest airport in the world. It’s been said that you can’t even get to heaven without connecting through Atlanta. Our presence as a Southern regional transportation hub makes Atlanta an easy gaming destination for the two thirds of the population of the US that lives east of the Mississippi River.

Casino gambling can be a valuable addition to the economy of Georgia. I hope that the Georgia General Assembly can find its courage and conscience and votes in favor of casino gambling in the 2009 Legislative Session.

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2014-12-24T08:10:00.001-05:00

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A Look at the Kahnawake Gaming Commission 15 Years Later

2014-12-18T08:00:00.001-05:00

A Look at the Kahnawake Gaming Commission 15 Years Later

By: Hartley Henderson - Exclusive to OSGA.com
Published: Dec 16, 2014

Heads turned at one of the early GIGSE conferences when a group from the Native Reserve of Kahnawake (just outside of Montreal) announced they were going to start accepting applications for Internet gamblinglicenses to run on their servers. At that time most offshore gambling was hosted in Antigua or Costa Rica where the reliability of server connection was somewhat unstable so the opportunity to be hosted on North American soil where the connections were far more stable was welcome. Moreover, the fee for a Kahnawake Gaming Commission (KGC) offshore gambling license was a fraction of other jurisdictions. The question many had at the time was whether what the Kahnawake Mohawks were doing was legal and more importantly whether they would cooperate with U.S. or Canadian authorities if the legality of their operations was ever challenged. Nevertheless the appeal was far too great to ignore and many companies including Intertops,Bodog and Sports Interaction took the gamble and purchased a Kahnawake license.

Things went quite smoothly and the concern over the legality of the operations was allayed when a Liberal MP who spoke at the conference a couple of years later called Mohawk Internet Technologies (MIT) a success story. As well the Quebec police did enter the reserve at times but they were clearly there just to observe and there was never an indication they were going to challenge the Mohawks in court. Of course the Oka Crisis of 1990 (a land dispute between a group of Mohawk people and the town of Oka, Quebec) was still fresh in the minds of police and the media. In the summer of 1990 Quebec police and the Royal Canadian Mounted Police were lambasted for ceding to the Oka mayor's demands and taking the side of a golf course developer who wanted to build the course on Mohawk burial grounds. The standoff led to the death of a Quebec police officer and an over-reaction by the police force that still remains a black mark on Canadian police to this day. So a confrontation over gambling rights was clearly the last thing the Federal or Provincial government wanted at that time (or even today).

The KGC experienced their first real crisis in 2007 when it was revealed that 2 sites being hosted on MIT servers were cheating players in high stakes poker tournaments. Absolute Poker and Ultimate Bet had a flaw in their programs which allowed former software developers and managers of those sites to use super user accounts to cheat in tournaments. The cheating was clearly illustrated from posts at the 2 plus 2 gambling servers. The KGC conducted an 18 month investigation spearhead by former New Jersey regulator, Frank Catania, which among other thing directed Ultimate Bet to repay players over $23 million in funds lost in the tournaments. An Ontario court ruled that the faulty software existed when the companies were licensed in other jurisdictions, prior to the sale of the companies to former Chief Joseph Norton and ordered the 2 companies which sold the faulty software to repay Ultimate Bet over $16 million. Nevertheless the cheating was a black eye to the KGC. Yet licensees did not pull out and Absolute Poker and Ultimate Bet (which combined to become the Cereus Network) were forced to close after Black Friday when the 2 URLs were seized by the FBI. And despite the Cereus Network issues almost all other licensees have kept their sites operating.

With that in mind I decided to interview Dean Montour, Chairman of the KGC and Murray Marshall, the KGC's General Counsel to find out about how the KGC is doing today, what the plans are for the future and what has been learned from the incidents of the past.

Q: How many companies are currently licensed by the KGC and what are their offerings by percentage (sports, casino, poker, bingo)?
A: The KGC has issued twenty-nine (29) Client Provider Authorizations ("CPAs"). Of these twenty-nine (29) licensees, five (5) are not yet live or presently operational. Of the remaining twenty-five (25) CPA's, their respective game offerings are broken down as follows:

Sportsbook : 8/25 (or 32%)
Casino : 21/25 (or 84%)
Poker : 10/25 (or 40%)
Bingo : 2/25 (or 8%)

In addition to the foregoing, the KGC has issued five (5) Inter-Jurisdictional Authorizations ("IJA's) to companies who are primarily licensed in another jurisdiction.

Q: There seems to be some confusion over whether the owner of a site operating in Kahnawake has to be Mohawk owned. Can you elaborate?
A: The KGC has never had a requirement making it mandatory that the holders of CPAs (operator permits) be Mohawk owned and operated. However, in accordance with the requirements of the Kahnawake Gaming Law, the holder of an Interactive Gaming License ("IGL") must be Mohawk. Only one IGL has been issued, and it was issued to Mohawk Internet Technologies, which is 100% Mohawk owned and operated.

Q: So is it similar to the arrangement in New Jersey whereby any company can own an online gambling website but they have to be partnered with a company with a physical site in Atlantic City which maintains the license – eg. Betfair owned the Betfairpoker website but Trump was the partner and kept the license?
A: Yes, it is similar in a sense that all CPA's must be appended to the IGL to be valid. However, unlike the commercial arrangement between Betfair and Trump in New Jersey, the purpose for having this arrangement is strictly to ensure that all CPA's are hosted at Mohawk Internet Technologies, which further ensures that the KGC has regulatory leverage. In other words, the KGC can effectively direct the IGL to disconnect or "unplug" hosting services for any non-compliant licensee.

Q: Can someone who works at one of the websites (say Bovada) live on the Kahnawake Reserve if they are not Mohawk?
A: No. In accordance with the Kahnawake Membership Law, anyone eligible to reside in Kahnawake must be on the Kahnawake Membership Registry. However, there are many Mohawks and non-Mohawks who work in Kahnawake at the many businesses established in the Community (Bodog included).

Q: The Absolute Poker/Ultimate scandal was a black eye to the KGC but you seemed to come out of it ok. What would you attribute to the fact that most companies continued to renew their licenses in spite of the scandal and what would you say the KGC learned most by what transpired with those sites?
A: As you are aware, Kahnawake was one of the first jurisdictions in the world to license, regulate and host online gaming sites. The KGC has a regulatory model that has been honed over the past 15+ years and that is constantly evolving to balance the imperative to protect players with the needs of the industry. Mohawk Internet Technologies is still the premier hosting facility for the online gaming industry in North America.
The KGC's investigation into the AP/UB cheating scandals resulted in significant sanctions against these companies but, more importantly, resulted in more than US$23,000,000.00 being repaid to affected players – a reimbursement that was (and is) unprecedented in the gaming industry.
In 2008, as a result of the AP/UB cheating scandals, the KGC undertook an extensive audit of its operations and made numerous enhancements to its administration, Regulations and regulatory functions.

Included in this overhaul and improvement of its operations:

Design and implementation of an enhanced Continuous Compliance Program
Development of a new "Certificate of Good Standing" (linked to the new KGC Logo)
Increase in staff for regulatory oversight and administration purposes
Enhanced player protection measures (Comprehensive Self Exclusion Program)
Overhaul of Complaint and Dispute Resolution Services

The cheating scandals were a humbling experience for the KGC. However, as a result of this, we learned valuable lessons and as a result have become much better regulators.

Q: There are conflicting reports about whether Joseph Norton ever got money back from Excapsa and whether you were able to ever press charges against Russ Hamilton and Scott Tom. Can you comment about what exactly was done to try and get retribution from the 2 scam artists or where it currently sits?
A: It is our understanding that Excapsa paid a significant sum to the corporate owner of UB.com as part of a settlement agreement that was reached between the parties. However, the KGC was not involved in that transaction and has no further details.
During the course of its investigations into the AP and UB cheating scandals, the KGC became aware of information indicating that in addition to breaches of the KGC's Regulations, the actions taken by certain individuals may have been criminal in nature. Accordingly, the KGC contacted law enforcement authorities and provided its full cooperation to them. The KGC was not a party to any subsequent investigations initiated by law enforcement authorities and has no further information in this regard.

Q: What has the Canadian and/or the American governments said to you personally about the KGC? Are you concerned at all by recent announcements by the governments of Ontario and Quebec that they are going to crack down on unlicensed sites in an effort to help build their own provincial online gambling? If not, why not? If so what are you planning to do about it?
A: The KGC is not involved in any discussions with Canadian or American governments about jurisdictional issues as they are not the KGC's mandate. The KGC has an excellent working relationship with regulatory agencies in the US at both the State and the Tribal levels.
The KGC is aware of the efforts that Ontario, Quebec and other provinces have made to bring their gaming products online. We are unaware of any provincial efforts to "crack down on unlicensed sites" but would support such an effort as the KGC's operators are, in fact, licensed and offer their services within a highly regulated environment.

Q: Is the KGC doing anything with their sites to abide by the new rules by the UK Gambling Commission? In better words are you asking sites to separate wagers from UK customers vs. the rest of the world so that the UK can get their 15% of gross profits or are you asking sites not to accept UK customers. I'm assuming the UK customer base isn't very high anyways.
A: The KGC has a good working relationship with the UK Gambling Commission concerning gaming regulatory matters. However, with regard to taxation, Kahnawake has no tax treaty with the UK. Accordingly, the KGC has no mandate to assist in the enforcement of the UK's taxation laws nor has it been requested to do so.

Q: Has the KGC talked with any of the other Mohawk groups in the U.S. or Canada about coming aboard and setting up satellite offices? I know Akwasasne and the one in Calgary (forget the name) seemed interested in setting up their own servers.
A: The KGC has had numerous discussions with various Tribes in the US and First Nations in Canada – both Mohawk and other Nations. The KGC has issued an Inter-Jurisdictional Authorization to the Santa Ysabel Tribe in California for its poker site, which is not yet accepting real money bets.

Q: What do you see in the near and distant future for the KGC and do you have a goal for the number of licensed sites you would like to see by 2020?
A: Over the past 12 months, the KGC has seen resurgence in the number of inquiries and applications for licensure it has received. This may be attributed to operators' dissatisfaction with other jurisdictions where they experience: higher licensing/hosting costs; gaming revenue taxes; onerous bureaucratic requirements and unreliable connectivity. The renewal of interest in locating (or re-locating) in Kahnawake is also a result of the KGC's new licensing category – Inter-Jurisdictional Authorizations – which offer an operator unprecedented access to Kahnawake's hosting services without incurring significant costs or delay.

Q: Is there anything you would like to say to any companies that are considering offering online gambling and are looking for a place to host their site or to any online companies that are unhappy with the service in their current location?
A: There are many reasons for an online gaming operator to consider re-locating to Kahnawake. For over 15 years, Kahnawake has been the market leader in licensing and hosting online gaming operators. Kahnawake's hosting facility – Mohawk Internet Technologies – offers state-of-the-art services in a secure environment. The KGC has a progressive regulatory regime that balances the need for player protection with the realities of the industry. The cost of operating in Kahnawake – for both licensing and hosting – is competitive with other jurisdictions. Kahnawake imposes no taxes on operators. For more information about becoming licensed by the KGC, visit our website: www.gamingcommission.ca

Read insights from Hartley Henderson every week here at OSGA and check out Hartley's RUMOR MILL!

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By GEORGE P. FLETCHER

TERMINIELLO v. CITY OF CHICAGO | FindLaw

United States Supreme Court

TERMINIELLO V. CITY OF CHICAGO, (1949)

No. 272

Argued: February 1, 1949 Decided: May 16, 1949

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