John Smith was the owner of a 50-room hotel in New Orleans. For several years in a row his hotel suffered serious damage during the Bayou Classic. John Smith decided that admission to the upper floors of the hotel would only be allowed for persons who had a room key during the Bayou Classic weekend. This rule did not apply to any other weekend of the year. The Southern University Alumni Association sued in Federal Court claiming that this action was discrimination against Southern University students and Alumni who were mostly African American. John Smith replied that his hotel rarely served non-Louisianans and therefore Federal Court had no jurisdiction over the action. John Smith further alleged that the Alumni Association was a Louisiana Corporation and therefore there was no diversity between the parties. The Alumni Association organized a demonstration to protest the actions of the Hotel. Fearing violence, the mayor said on television that the leadership of the Association was trying to incite violence and were too dumb to realize that the demonstration would do more harm than good. The mayor said that the city would not allow the demonstration.

Discuss the legal issues raised by these facts.