This case, like the earlier, ACLU-represented case Bailey v. Loggins, concerns inmates at a California prison and their freedom of speech rights as they pertain to a inmate-edited, taxpayer-funded prison newspaper. The case challenges prison regulation of said newspaper, as enforced by the superintendent of the prison, the director of the Department, and others, and as established in Bailey v. Loggins.

Victor Diaz and Eric Martin were two former inmates at the California Medical Facility at Vacaville (CMF) and editors of the prison newspaper, the Vacavalley Star (or the Star). They were challenging prison regulations as enforced by Hal Watts, Acting Superintendent of the prison. The case was filed in 1981 and concerns censorship disputes in 1980. The regulations cited here in Bailey v. Loggins state: "...provided generally that the newspaper should conform to good journalistic standards, be designed to appeal to all inmates, and avoid material offensive to racial, religious, or political groups .... [T]he guidelines prohibited the use of the newspaper to attack administration rules or policy, or to assert any grievance. They also banned the assumption of an editorial position on pending legislation, the attempt to elect or defeat any official, or an attack upon existing governmental policy." Diaz and Martin challenged the interpretation of these standards as overly broad, or vague.

The court spends a great deal of time debating the "valid penological objectives" reason for censorship, and writes that critics of the argument have failed to consider the meaning of the term "penological." They write: "'Penology,' the root of the word 'penological,' is a branch of criminology dealing with prison management and treatment of offenders, especially with regard to their rehabilitation." They prioritize the protection of the public, and consider prisoners a "special case" and prison a unique environment with its own rules and needs.

The court affirms the original judgement, and conclude: "The regulations under consideration constitute a reasonable attempt on the part of the Department to implement a prison newspaper program to enhance the rehabilitation of inmates through training and education which may offer them hope, but at least will occupy their time in a constructive manner--clearly a valid penological objective which will contribute to both the security of the institution and the protection of society."