PROVO -- In the end, it didn't matter whether the movies were obscene.

What mattered was Lehi granted Movie Buffs a business license five years ago.That was enough for a jury to acquit Larry Warren Peterman in 4th District Court Wednesday on 15 misdemeanor counts of distributing pornographic material. The former Movie Buffs general manager rented cable-edited X-rated videos from the now defunct Lehi and American Fork outlets until police raided them in October 1996.

Jurors, who deliberated 2 1/2 hours, said Lehi officials should have been more diligent in their review of the proposed store before issuing a permit.

"They should have viewed the movies. They should have seen what was coming to their town," juror Kimberlee Clem said.

Nearly three weeks of legal wrangling about community standards and prurient interest didn't mean much to the four-woman, two-man jury. What happened at several Lehi City Council meetings in November 1994 was "all of it," Clem said.

The council back then issued Peterman a business license after it sent Police Chief Karl Zimmerman to examine the adult room of a Movie Buffs store in Layton. The chief's perusal of video box covers didn't yield an objection to what might be contained on the tapes. Peterman told the city he would stock cable versions of sexually explicit movies.

Still, city officials testified during the trial that they didn't understand the content of the movies, although defense attorney Randy Spencer said they reasonably should have known because of Peterman's explanation and their own investigation.

"It just seemed like they lost the ball right there," said juror Betty Gleason. "I feel like (Peterman) thought he was operating within the law."

State prosecutors didn't see it that way.

And deputy Utah County attorney Curtis Larson didn't sugarcoat his opinion of the videos with titles such as "Sticky Lips" and "Sex Wish" during closing arguments Wednesday.

"These movies are nothing more and nothing less than vile concoctions of scum, sleaze and sludge," he said. "They're crass exploitations of sex."

Larson said Peterman misled Lehi when he applied for the business license. He didn't tell them about the sex acts that would be depicted in the cable-edited X-rated films, Larson said.

"He knew that they were sleazy. Yet he brought them in because he has no interest in the community standard. He wanted to make money," Larson said.

Money is something Peterman has had little of since the Utah-based chain he helped establish went out of business last year. The 50-year-old West Point man has spent the past 2 1/2 years defending himself from charges he believes were unjust from day one.

Investigators seized nearly 1,000 videos from the two Utah County outlets in October 1996 after Doug and Michelle Brockbank complained to authorities about the American Fork store's adult room. The couple's then 5-year-old son had wandered into the over-21 section and picked up a raunchy video. The couple was appalled a what they saw.

"A simple 25-cent phone call would have saved millions or hundreds of thousands of dollars and not ruined a lot of people," Peterman said. "We were responsible business people, just trying to offer what our customers wanted. We would have taken action if anyone had objected. No one ever did."

Peterman came close to being found guilty in his first trial last June -- a thought Spencer described as "scary." One juror hung the panel because was uneasy about setting a community standard even though he found the movies pornographic.

Divorced, broke and unable to pay his legal bills, Peterman was appointed a public defender for the second trial.

Spencer employed a defense strategy that Peterman's first attorney did not. He showed the jury a half-dozen hard-core sex films for comparison's sake, but more important, he brought the business license into play. Peterman "completely believed he was doing everything needed to comply with the law," Spencer said.

The verdict also means Utah County will dismiss charges against Peterman's ex-wife and former Movie Buffs owner Susan Janae Kingston and former district manager Marjorie Ann Cramer. Both reached plea in abeyance agreements with prosecutors last year.

Utah County Attorney Kay Bryson said he was disappointed that the jury failed to set a clear community standard for obscenity. "We wouldn't have brought this case if we didn't think the material violates Utah County standards. I personally still believe it does," he said.

Bryson said he doesn't think the case sets a precedent. His office will continue to investigate complaints and enforce pornography laws, he said.

Doug Brockbank, who became an anti-pornography activist after his complaint launched the drawn-out case, was dejected with the outcome.

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"I guess I'm kind of shocked. Maybe another day another jury would have a different verdict. I'm kind of at a loss for words. To me, it was a clear-cut case," he said.

From the beginning, Spencer said the issue was not pornography but freedom to choose. "We are not all the same. We accept that. Whether you watch sexually explicit movies or not, the average person in Utah County allows people to be free," he said.

For his part, Peterman doesn't see himself as some noble defender of the First Amendment. "I wasn't trying to push the envelope and force material that wasn't accepted on anybody," he said. He's a businessman who isn't sure what to do with himself now.

"I don't know what my plans are," he said. "I'll just try to pick up the pieces and get on with my life."

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