Is DIY-Censorship Legal?

Following the news that the owners of the Sunrise Family Video store in American Fork, Utah, are editing the naughty bits out of Titanic and selling it to people for a $5 dollar charge, a Paramount spokesperson said that the studio views such "unauthorized alteration" as a violation of its copyright and that it "will take all necessary and appropriate action to protect our interests." However, yesterday's USA Today quoted a Los Angeles copyright lawyer, Jeffrey Briggs,as saying, "Unlike Europe, the United States does not recognize the 'moral rights' of the author, which protect the author's work from being changed." It also roped in New York trademark attorney, Elhanan Stone, who went further, saying, "There's no copyright violation there. Once that piece of tape belongs to you, you can do whatever you want with it."