Wilks

MEMORANDUM OF DECISION RE STATE ACTION

State action is a murky, intensely fact-bound inquiry, which often reduces to an easy-to-frame but hard-to-answer issue: How much state “encouragement” of private conduct is enough to transform that private conduct into “state action”?

In 1988, the California Legislature amended the Public Utilities Code to say that telephone billing and collection services available to “harmful matter” informa tion providers are not subject to the control of the California Public Utilities Commission (“CPUC”), “but are a matter for contractual arrangement between the telephone corporation and the information provider.” Cal.Pub.Util.Code § 2884.2(a) (West Supp.1991) (hereafter “section 2884.-2”).

Defendants Pacific Bell (“PacBell”) and GTE California (“GTEC”) have attempted to withhold billing and collection procedures from plaintiffs, the providers and listeners of sexually explicit, non-obscene telephone services often referred to as “dial-a-porn.” Without billing and collection services, plaintiffs will soon go out of business.

Plaintiffs argue that the first amendment protects their rights to speak freely, to receive information freely, and to…