(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued February 1, 1994 -- Decided June 7, 1994
STEIN, J., writing for a unanimous Court.
This appeal addresses the validity of a City of Trenton municipal ordinance that bans hawking,
peddling, or vending in a statutorily-authorized Special Improvement District (SID). The ordinance exempts
from that prohibition pushcart peddling conducted by and adjacent to restaurants that operate in the SID.
Louis Fanelli is a food vendor holding a license under a State statute that gives armed-services veterans the
right to peddle. He challenges the ordinance on the grounds that it: 1) exceeded the State's delegation of
legislative powers to the municipality; 2) conflicted with his statutory right to peddle; 3) violated federal and
state constitutional due-process and equal-protection guarantees; and 4) violated federal and state antitrust
laws.
The Chancery Division rejected Fanelli's challenges to the ordinance. The court determined that the
ordinance had been authorized under the State's police power and established pursuant to the authority
delegated to municipalities by the statute authorizing the establishment of SIDs, N.J.S.A. 40:56-65 to -89
(SID statute). In addition, the court found that the ordinance survived Fanelli's equal-protection and due-process challenges as an economic regulation that was rationally related to achieving a legitimate public
interest. Lastly, the court concluded that state-action immunity shielded the ordinance from attack under
both federal and state antitrust laws.
On appeal, the Appellate Division affirmed substantially for the reasons expressed in the Chancery
Division opinion. The Supreme Court granted certification.
HELD: The City of Trenton's municipal ordinance banning independent peddlers within the Special
Improvement District (SID) furthers the policies of the SID statute as authorized by N.J.S.A.
40:56-77(b)(2). Furthermore, the ordinance does not violate state or federal equal-protection and
due-process rights because the ordinance is rationally related to the legitimate statutory objective
of revitalizing downtown shopping districts. Finally, because the ordinance is authorized by the
SID statute and the anticompetitive effect of the ban is a foreseeable result of that authorization,
the result does not violate state antitrust laws and constitutes state action that is immune from
challenge under federal antitrust laws.
1. The authorization for Trenton's ordinance arises from the SID statute, rather than from the general
police power of the municipal authority to license and regulate. In 1984, the Legislature amended the
pedestrian-mall statute to authorize the creation of SIDs and district management corporations to manage
them. The purpose of the Legislature's authorization of the creation of SIDs was the promotion of economic
growth and employment in local business districts; it was not restricted to concerns related to pedestrians.
An examination of the objectives and implementing provisions of Trenton's ordinance demonstrates that it is
a valid exercise of the authority delegated to the city in the SID statute. The ordinance furthers the objective
of the economic revitalization of downtown shopping areas and is authorized under a broad construction of
the regulatory powers delegated to municipalities by the SID statute. In addition, the limitation on pushcart
vending to areas adjacent to established restaurants is consistent with another municipal ordinance and
furthers the statutory purpose of promoting the movement of pedestrian traffic within the SID. (pp. 6-10)
2. The ordinance does not conflict with the statute granting veterans the right to peddle; the last
paragraph of that statute states that hawking, peddling and vending may be regulated by municipal ordinance.
Moreover, the SID statute specifically authorizes municipal control and regulation of vendors within the SID.
Thus, that authorization is a specific limitation on the rights generally granted in the vendor-statute.
Moreover, to any extent that a conflict exists between the two statutes, there is no doubt that the legislative
intent is that the SID statute prevail. (pp. 10-11)
3. To withstand Fanelli's claim that the ordinance violates federal and state constitutional due-process
and equal-protection rights, the statutory authorization must be rationally related to the achievement of a
legitimate state objective. Revitalization of the downtown shopping districts in New Jersey's cities is a
legitimate state objective. An ordinance prohibiting independent vendors from operating in a downtown area
selected for revitalization is rationally related to that objective. The ordinance creates an economic climate
within the SID designed to promote, attract, and retain resident businesses. The ban also promotes the flow
of pedestrian traffic by limiting outdoor vending to operations that are adjacent to resident businesses.
Therefore, under the minimum-scrutiny analysis, the ordinance survives federal and state due-process claims
and the federal equal-protection claim. The ordinance also survives a State equal-protection challenge
because the regulation does not unduly restrict the right of peddlers to engage in their business. (pp. 11-13)
4. Trenton's ban on peddlers within the SID is immune from federal antitrust challenge under the
state-action doctrine. The SID statute specifically authorizes a city to regulate peddling to further its
economic-vitalization policies. That authorization clearly meets the requirement that the anticompetitive
action be a foreseeable result of state authorization. Furthermore, ordinances enacted pursuant to the SID
authorization are entitled to state-action immunity from federal antitrust liability. The New Jersey Antitrust
Act does not apply either; a necessary premise to Fanelli's State antitrust claim is that the ordinance is not
directed, authorized or permitted by State law. Because the ordinance is authorized by the SID statute,
Fanelli's argument fails. (pp. 13-19)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ and JUSTICES CLIFFORD, HANDLER, POLLOCK, O'HERN and
GARIBALDI join in JUSTICE STEIN's opinion.
SUPREME COURT OF NEW JERSEY
A-
82 September Term 1993
LOUIS FANELLI,
Plaintiff-Appellant,
and
LOUIS SHEPHERD, ROBERT
BRIGGS, and RAYMOND WYLIE,
Plaintiffs,
v.
CITY OF TRENTON, a body
politic of the State of New
Jersey,
Defendant-Respondent,
and
TRENTON MERCHANTS ASSOCIATION
and CENTRAL TRENTON INCORPORATED,
Defendants.
Argued February 1, 1994 -- Decided June 7, 1994
On certification to the Superior Court,
Appellate Division.
Charles J. Casale, Jr., argued the cause for
appellant.
Robert J. Paci, Assistant City Attorney,
argued the cause for respondent (Rocky L.
Peterson, City Attorney, attorney).
Richard S. Goldman argued the cause for
amicus curiae, Trenton Downtown Association
(Drinker, Biddle & Reath, attorneys).
The opinion of the Court was delivered by
STEIN, J.
This appeal requires the Court to determine the validity of
a municipal ordinance that bans hawking, peddling, or vending in
a statutorily-authorized Special Improvement District (SID). The
ordinance exempts from the prohibition pushcart peddling
conducted by and adjacent to restaurants that operate in the SID.
Plaintiff is a food vendor holding a license under a State
statute that gives armed-services veterans the right to peddle.
He challenged the municipal ordinance on the grounds that it (1)
exceeded the State's delegation of legislative powers to the
municipality; (2) conflicted with plaintiff's statutory right to
peddle; (3) violated federal and state constitutional due-process
and equal-protection guarantees; and (4) violated federal and
state antitrust laws. The Chancery Division upheld the validity
of the ordinance and the Appellate Division affirmed. We granted
plaintiff's petition for certification,
134 N.J. 481 (1993), and
now affirm.
Plaintiff Louis Fanelli owns and operates a vending cart from which he sells food and beverages such as frankfurters, meatball sandwiches, doughnuts, soft drinks, and coffee. Plaintiff is licensed by the State pursuant to N.J.S.A. 45:24-9, which grants honorably-discharged military personnel, among others, "the right to hawk, peddle and vend any goods, wares or
merchandise * * * within this State, by procuring a license * * *
." Plaintiff estimates that he has held such a license for
approximately twenty to thirty years.
Plaintiff's cart is five-feet long and three-and-one-half-feet wide, weighing an estimated one-thousand pounds. Plaintiff
stands inside the cart when serving his customers and has no
employees. He transports the cart to his desired location by
securing it to a trailer hitch on his car. Once plaintiff moves
the cart into position for business, the cart remains stationary.
In May 1988 plaintiff began operating his cart in the City
of Trenton (the City or Trenton) at State and Montgomery Streets.
That location is across the street from a pedestrian mall known
as "the Commons." Both plaintiff's location and the Commons are
part of a SID that Trenton created in 1986 pursuant to N.J.S.A.
40:56-65 to -89. See Trenton, N.J., Ordinance No. 86-27 (Apr. 1,
1986). To operate in Trenton, plaintiff had to obtain a permit
at a cost of $250 and comply with the applicable regulations.
In September 1988 Trenton passed Ordinance No. 88-78, which
amended the City's SID ordinance. Ordinance No. 88-78 stated in
pertinent part:
[The SID ordinance] shall be and is
hereby amended to provide certain limitations
on the uses to be permitted in the [SID] by
concessionaires, vendors, peddlers and
hawkers to promote economic growth and
employment within the [SID], by means of the
following amendment * * * :
WHEREAS, N.J.S.A. 40:56-65 et seq. provides for the creation of a [SID] * * * to assist municipalities in promoting economic growth and employment within business
districts; to provide the municipality with
the broadest possible discretion to establish
by local ordinance, self help programs most
consistent with the local needs, goals and
objectives; and, to permit the governing body
to protect the public welfare and health and
the interest of the public in the safe and
effective movement of persons and to preserve
and enhance the function and appearance of
the business districts; and
WHEREAS, the governing body finds that
vending, hawking or peddling of any foods,
beverages, confections, goods, wares,
merchandise or commodities of any nature * *
* within the [SID] will undermine the
economic growth and employment within the
[SID] and will inhibit the safe, convenient
and effective movement of persons and detract
from the function and appearance of the
[SID]; and
WHEREAS, the governing body finds that
vending, hawking or peddling of any foods,
beverages, confections, goods, wares[,]
merchandise or commodities of any nature * *
* within the [SID] should be prohibited
unless specifically authorized by [the] City
Council pursuant to rules and regulations
formally adopted by [the] City Council in
accordance with the standards enunciated in
N.J.S.A. 40:56-65 et seq.
NOW THEREFORE, the Council of the City
of Trenton ordain[s]:
* * * *
* * * No person shall engage in hawking, peddling or vending of any foods, beverages, confections, goods, wares[,] merchandise or commodities of any nature or description on the streets and sidewalks within the City of Trenton's [SID] unless such use, and the location thereof, has been specifically authorized by [the] City Council pursuant to rules and regulations formally adopted by [the] City Council in accordance with the standards enunciated in N.J.S.A. 40:56-65 et seq. This ordinance shall not prohibit sales activities conducted by a person holding a license to operate a restaurant from
operating a pushcart on a sidewalk
immediately adjacent to a licensed premises *
* * .
Plaintiff operated his cart at the State-and-Montgomery
location until October 1988, when he learned of the ordinance and
ceased operating in Trenton. Plaintiff sought a temporary
restraint on enforcement of the ordinance through an order to
show cause, but was denied injunctive relief. Subsequently,
plaintiff obtained leave to amend an existing complaint
challenging another Trenton ordinanceSee footnote 1 to add challenges to the
validity of the SID ordinance. In a second amended complaint
filed in January 1989, plaintiff added a count for antitrust
violations.
Plaintiff testified at trial that the Commons area was a
prime location for his food-vending business because its shops
attract lunchtime pedestrian traffic from nearby office
buildings. Plaintiff's testimony also suggested that other
desirable locations not within the SID were available to vendors
in Trenton, including one at Front and Stockton Streets to which
plaintiff had relocated in March 1989. (We note that a
subsequent amendment to the SID ordinance in March 1993 altered
the SID's boundaries so that it now encompasses the Front-and-Stockton location. Trenton, N.J., Ordinance No. 93-27 (Mar. 5,
1993).) In addition to plaintiff's testimony, the trial court
admitted into evidence transcripts of City Council meetings
prepared by plaintiff's counsel suggesting that the primary
purpose of the vending ban was to protect existing stores and
restaurants from competition.
The Chancery Division rejected plaintiff's challenges to the
ordinance. The court determined that the ordinance had been
authorized under the State's police power and established
pursuant to the authority delegated to municipalities by the
statutes authorizing the establishment of SIDs. In addition, the
court found that the ordinance survived equal-protection and due-process challenges as an economic regulation that was rationally
related to achieving a legitimate public interest. Finally, the
court concluded that state-action immunity shielded the ordinance
from attack under both federal and state antitrust laws. The
Appellate Division affirmed substantially for the reasons
expressed in the Chancery Division opinion.
In considering whether the City's ordinance is a valid exercise of authority granted by the State, we bear in mind that municipal ordinances enjoy a presumption of validity. Brown v. City of Newark, 113 N.J. 565, 571 (1989). Our cases have established that a municipal prohibition on peddling that serves
no purpose other than to protect local businesses from
competition is an invalid exercise of a municipality's police
power. See, e.g., id. at 583-84; Moyant v. Borough of Paramus,
30 N.J. 528, 544-45 (1959); N.J. Good Humor, Inc. v. Board of
Comm'rs,
124 N.J.L. 162, 168-71 (E. & A. 1940). However, we need
not apply that principle here because authorization for Trenton's
ordinance derives from the SID statutes, N.J.S.A. 40:56-65 to -89, rather than from the general police power or the authority to
license and regulate. Specifically, N.J.S.A. 40:56-77 states:
b. Upon adoption of a pedestrian mall
or special improvement district ordinance,
the governing body may, from time to time,
provide for the control and regulation of:
* * * *
(2) The uses to be permitted on the mall
or special improvement district property by *
* * concessionaires, vendors and others to
serve the convenience and enjoyment of
pedestrians and the location of such uses[.]
Plaintiff argues that that language, as well as language in
subsection a that sets forth as permitted uses of SID property
"any purpose or activity [that] will enhance the movement,
safety, convenience or enjoyment of pedestrians," N.J.S.A. 40:56-77a, demonstrates that the Legislature authorized only regulation
of uses that had the purpose of promoting the interests of
pedestrians. According to plaintiff, the City Council never
considered the interests of pedestrians in enacting the vending
ban. Rather, plaintiff contends, the City Council considered
only the welfare of businesses located in the SID, noting the
ordinance's exemption from the vending ban for existing merchants
and restaurants as well as statements made during City Council
meetings.
Plaintiff's argument overlooks the history of the pertinent
statutes and the legislative findings that inform their
interpretation. As originally enacted, L. 1972, c. 134, the
statutes that now authorize the creation of SIDs provided only
for the creation of pedestrian malls. The legislative findings
underlying that enactment stressed concerns about pedestrian
mobility and vehicular-traffic congestion. See N.J.S.A. 40:56-65a. In 1984, the Legislature amended the pedestrian-mall
statutes to authorize the creation of SIDs and district
management corporations to manage them. L. 1984, c. 151. Among
the various amendments was the following addition to the
legislative findings in N.J.S.A. 40:56-65:
b. The Legislature further finds: (1)
that district management corporations may
assist municipalities in promoting economic
growth and employment within business
districts; (2) that municipalities should be
encouraged to create self-financing special
improvement districts and designated district
management corporations to execute self-help
programs to enhance their local business
climates; and (3) that municipalities should
be given the broadest possible discretion in
establishing by local ordinance the self-help
programs most consistent with their local
needs, goals and objectives.
Clearly, the Legislature's authorization of the creation of
SIDs was driven by a desire to promote economic growth in local
business districts and was not restricted to concerns related to
pedestrians. See Office of the Governor, News Release on Senate
Bill No. 1680 (Sept. 10, 1984) (stating, "The legislation extends
the currently-held authority of municipalities to create
pedestrian malls as a local business improvement project. The
creation of special improvement districts would be an additional
method of revitalizing older downtown shopping districts.")
(emphasis added). Because the 1984 amendments made the
directives in N.J.S.A. 40:56-77 regarding permitted uses and the
regulation of peddling applicable to SID property, see L. 1984,
c. 151, § 13, we must read those directives in the context of the
distinct SID purposes set forth in N.J.S.A. 40:56-65b.
An integral part of the promotion of economic growth and
employment in downtown business districts is the creation of a
commercial climate that encourages stores to open and remain in
business. The legislation authorizing SIDs enables local
businesses to work together to enhance economic growth and
employment. Indeed, the businesses located in Trenton's SID pay
a special assessment of up to 4.5" of their annual property tax
or payments in lieu of tax to finance the SID programs and
improvements. Trenton, N. J., Ordinance No. 86-32 (Apr. 17,
1986).
In determining whether Trenton's ordinance is authorized by
the SID statute, we do not pass on the wisdom of the City's plan.
We need decide only whether the ordinance represents a reasonable
exercise of the Legislature's delegation of authority to
municipalities in enacting the SID statute. See Riggs v.
Township of Long Beach,
109 N.J. 601, 610-11 (1988).
Furthermore, we interpret those delegated powers broadly. See
N.J. Const. art. 4, § 7, ¶ 11.
An examination of the objectives and implementing provisions
of Trenton's ordinance demonstrates that that ordinance is a
valid exercise of the authority delegated to the City in the SID
statute. To the extent that the purpose of the ordinance is to
promote business establishments that will thrive, pay taxes, and
provide employment, the ordinance furthers the objective of the
economic revitalization of downtown shopping areas, and thus is
authorized under a broad construction of the regulatory powers
delegated to municipalities by the SID statutes. In addition,
the ordinance's limitation on pushcart vending to areas adjacent
to established restaurants is consistent with another municipal
ordinance permitting the display and sale of goods on the
sidewalk abutting existing businesses within the SID, and
furthers the statutory purpose of promoting the movement of
pedestrian traffic within the SID.
We also conclude that the ban does not conflict with the statute granting veterans the right to peddle, N.J.S.A. 45:24-9. The last paragraph of that provision states that "[h]awking, peddling and vending * * * may be regulated by municipal ordinance * * * ." We note that the City's ordinance does not prohibit peddlers from operating in Trenton. Rather, it reasonably limits the areas in which they may operate, and thus
is properly characterized as a regulation. See N.J. Good Humor,
supra, 124 N.J.L. at 167 (distinguishing municipal prohibition of
peddling from regulation).
Because the SID statute authorizes municipalities to ban
peddlers within the SID, we consider whether that authorization
supersedes the statutory provisions granting veterans the right
to peddle. See In re Boyan,
127 N.J. 266, 268-69 (1992). We
note that the SID statute specifically authorizes municipal
"control and regulation" of "concessionaires, vendors and others"
within the SID. N.J.S.A. 40:56-77b(2). We view that
authorization as a specific limitation on the general right
granted in the veteran-vendor statute. To the extent that a
conflict exists between the two statutes, we have no doubt that
the Legislature intended that the SID statute would prevail. See
Kingsley v. Wes Outdoor Advertising Co.,
55 N.J. 336, 339 (1970);
State v. Daquino,
56 N.J. Super. 230, 240 (App. Div.), certif.
denied,
30 N.J. 603 (1959), cert. denied,
361 U.S. 944,
80 S. Ct. 407,
4 L. Ed.2d 363 (1960).
We next consider plaintiff's claim that the ordinance violates federal and state constitutional due-process and equal-protection rights. We analyze both federal constitutional claims and the state due-process claim under minimum scrutiny, because the ordinance is an economic regulation that does not affect a suspect class. Thus, the statutory authorization need be only
rationally related to the achievement of a legitimate state
objective. See Brown, supra, 113 N.J. at 572-73. We consider
plaintiff's state equal-protection challenge under the balancing
test adopted for analysis of such claims. See id. at 573.
In New Orleans v. Dukes,
427 U.S. 297,
96 S. Ct. 2513,
49 L.
Ed.2d 511 (1976), the United States Supreme Court rejected an
equal-protection challenge to a New Orleans ordinance that banned
all pushcart vending in the French Quarter but exempted vendors
who had operated continually for eight years. The Court applied
minimum scrutiny and determined that the legitimacy of the
purpose of preserving "'the appearance and custom valued by the
Quarter's residents and attractive to tourists'" was "obvious"
and that the vending ban "plainly" was rationally related to that
objective. Id. at 304, 96 S. Ct. at 2517, 49 L. Ed.
2d at 517
(quoting Dukes v. City of New Orleans,
501 F.2d 706, 709 (5th
Cir. 1974), rev'd,
427 U.S. 297,
96 S. Ct. 2513,
49 L. Ed.2d 511
(1976)).
Similarly, revitalization of the downtown shopping districts
in New Jersey's cities is a legitimate state objective. The
demise of a city's downtown shopping area depresses public morale
and diminishes a city's ability to retain and attract businesses
and residents, damaging its economic vitality. Furthermore, an
ordinance that prohibits independent vendors from operating in a
downtown area selected for revitalization is rationally related
to that end. The ordinance creates an economic climate within
the SID designed to promote, attract, and retain resident
businesses. The ban also promotes the flow of pedestrian traffic
by limiting outdoor vending to operations that are adjacent to
resident businesses. As demonstrated in Dukes, supra, the fact
that the City Council exempted certain vending from the ban does
not render the ordinance irrational. See id. at 305, 96 S. Ct.
at 2517-18, 49 L. Ed.
2d at 518. Thus, we conclude that under
minimum-scrutiny analysis the ordinance survives plaintiff's
federal and state due-process claims and his federal equal-protection claim.
Furthermore, the ordinance survives plaintiff's state equal-protection challenge because "on balance, the regulation,
considering the public need, does not unduly restrict the right
of * * * peddlers to engage in their business." Brown, supra,
113 N.J. at 574. In reaching that conclusion, we appreciate
plaintiff's genuine concern that the ordinance will affect his
ability to prosper by denying him the right to locate his cart
within the SID. Nevertheless, we infer that the continued
availability to plaintiff of other locations in Trenton and the
public interest in promoting business stability within the SID
outweigh the potential harm that plaintiff may suffer by being
excluded from the SID.
Plaintiff's final argument is that Trenton's selective ban on vending violates sections one and two of the Sherman Act, 15 U.S.C.A. §§1, 2, and the comparable New Jersey antitrust
statutes. See N.J.S.A. 56:9-3, -4. We conclude that the "state
action" doctrine immunizes the City's ordinance from challenge
under the federal antitrust laws, see Parker v. Brown,
317 U.S. 341,
63 S. Ct. 307,
87 L. Ed. 315 (1943), and that the ordinance
does not violate the New Jersey Antitrust Act, N.J.S.A. 56:9-1 to
-19. See N.J.S.A. 56:9-5c (stating that New Jersey Antitrust Act
does not apply to activity "directed, authorized or permitted" by
state law).
This Court has previously applied the state-action-immunity
doctrine to uphold regulations that were alleged to violate the
federal antitrust laws. See Joseph H. Reinfeld, Inc. v.
Schieffelin & Co.,
94 N.J. 400, 416-18 (1983) (applying state-action immunity to agency order requiring wholesalers to boycott
liquor importer that had violated statute prohibiting importers
from discriminating among wholesalers); Bally Mfg. Corp. v. New
Jersey Casino Control Comm'n,
85 N.J. 325, 336 (1981) (applying
state-action immunity to agency regulation limiting percentage of
slot machines that casino could purchase from single supplier);
New Jersey Guild of Hearing Aid Dispensers v. Long,
75 N.J. 544,
565-66 (1978) (applying state-action immunity to regulatory price
guidelines promulgated by special state committee and approved by
state medical board); see also Monmouth Chrysler-Plymouth, Inc.
v. Chrysler Corp.,
102 N.J. 485, 493-94 (1986) (noting
applicability of state-action immunity to state statute that
authorized state agency to deny placement of automobile
dealerships in locations that would threaten stability of
existing same-line dealerships).
Although we consider for the first time the applicability of
the state-action doctrine to a municipal ordinance, we need only
briefly recount the doctrine's well-established principles, which
are set forth elsewhere in sufficient detail. See, e.g., Cine
42nd Street Theater Corp. v. Nederlander Org., Inc.,
790 F.2d 1032, 1042-44 (2d Cir. 1986); Monarch Entertainment Bureau, Inc.
v. New Jersey Highway Auth.,
715 F. Supp. 1290, 1293-96 (D.N.J.),
aff'd,
893 F.2d 1331 (3d Cir. 1989); Joseph H. Reinfeld, Inc.,
supra, 94 N.J. at 416-18. The United States Supreme Court first
announced the state-action exception to the Sherman Act in
Parker, supra, determining that "[t]he Sherman Act * * * gives no
hint that it was intended to restrain state action or official
action directed by a state." 317 U.S. at 351, 63 S. Ct. at 313,
87 L. Ed. at 326. Subsequent decisions sought to define the
scope of the immunity for situations in which entities to which
the state had delegated authority instituted the alleged
anticompetitive restraints. In City of Lafayette v. Louisiana
Power & Light Co.,
435 U.S. 389,
98 S. Ct. 1123,
55 L. Ed.2d 364
(1978), the Court determined that for a municipality to enjoy
state-action immunity, the challenged municipal action must have
been implemented "pursuant to state policy to displace
competition with regulation * * * ." Id. at 413, 98 S. Ct. at
1137, 55 L. Ed.
2d at 383. The Court suggested a two-prong test,
which required that the anticompetitive action be (1) "clearly
articulated and affirmatively expressed as state policy" and (2)
"actively supervised by the [State] as the policymaker." Id. at
410, 98 S. Ct. at 1135, 55 L. Ed.
2d at 381 (discussing Bates v.
State Bar,
433 U.S. 350,
97 S. Ct. 2691,
53 L. Ed.2d 810
(1977)).
However, in Town of Hallie v. City of Eau Claire,
471 U.S. 34,
105 S. Ct. 1713,
85 L. Ed.2d 24 (1985), the Court clarified
the extent to which that test applied to municipalities. First,
the Court expressly limited the requirement of active supervision
to situations in which the entity implementing the
anticompetitive regulation included private actors that could
benefit individually from the anticompetitive effects. Id. at
46-47, 105 S. Ct. at 1720, 85 L. Ed.
2d at 34. The Court
concluded that the active-supervision requirement "should not be
imposed in cases in which the actor is a municipality." Id. at
46, 105 S. Ct. at 1720, 85 L. Ed.
2d at 34.
More importantly, with respect to the requirement that state
policy to restrain trade be "clearly articulated and
affirmatively expressed," the Court stated that "in proving that
a state policy to displace competition exists, the municipality
need not 'be able to point to a specific, detailed legislative
authorization' in order to assert a successful [Parker] defense
to an antitrust suit." Id. at 39, 105 S. Ct. at 1716, 85 L. Ed.
2d at 29 (quoting Lousiana Power & Light Co., supra, 435 U.S. at
415, 98 S. Ct. at 1138, 55 L. Ed.
2d at 384). Rather, "It is
enough * * * if suppression of competition is the 'foreseeable
result' of what the statute authorizes." City of Columbia v.
Omni Outdoor Advertising, Inc.,
499 U.S. 365, 373,
111 S. Ct. 1344, 1350,
113 L. Ed.2d 382, 393 (1991) (quoting Hallie, supra,
471 U.S. at 42, 105 S. Ct. at 1718, 85 L. Ed.
2d at 31).
Applying those principles, we conclude that Trenton's ban on
peddlers within the SID is immune from federal antitrust
challenge under the state-action doctrine. As noted, supra at
___ (slip op. at 7-9), the SID statutes specifically authorize a
city to regulate peddling to further its economic-revitalization
policies. That authorization clearly meets the Hallie
requirement that the anticompetitive action be a foreseeable
result of the state authorization.
For example, in Omni Outdoor Advertising, supra, the Supreme
Court applied state-action immunity to uphold a city zoning
ordinance that restricted the construction of billboards. The
effect of the ordinance was to preserve the ninety-five-percent
market share enjoyed by a family-run billboard company that
enjoyed long-standing ties to the community and the city
government. The Court first rejected the plaintiff's argument
that the South Carolina zoning statutes had not authorized the
city's ordinance because the ordinance had not been passed to
further the statutory purpose of promoting the "'health, safety,
morals or the general welfare of the community.'" 499 U.S. at
371, 111 S. Ct. at 1349, 113 L. Ed.
2d at 392 (quoting S.C. Code
Ann. § 5-23-10 (Law. Co-op. 1976)). The Court concluded that for
purposes of state-action analysis, the statutory authorization to
the city to regulate uses was sufficient to establish that the
city ordinance had been authorized by the state. Determining
whether in fact the ordinance had been passed to further the
statutory purpose or in accordance with procedural requirements
was unnecessary for state-action analysis. Id. at 371-72, 111 S.
Ct. at 1349-50, 113 L. Ed.
2d at 392-93. The Court then
determined that the anticompetitive effects were the foreseeable
result of the zoning statutes' authorization to municipalities to
regulate uses. Id. at 373, 111 S. Ct. at 1350, 113 L. Ed.
2d at
393.
Similarly, the authorization in N.J.S.A. 40:56-77b(2) to
control and regulate "[t]he uses to be permitted on the * * *
[SID] property by * * * concessionaires, vendors, and others"
contemplates that such control and regulation may have an
anticompetitive effect. We need not find that the "delegating
statute explicitly permits the displacement of competition."
Omni Outdoor Advertising, supra, 499 U.S. at 372, 111 S. Ct. at
1350, 113 L. Ed.
2d at 393. Therefore, we conclude that
ordinances enacted pursuant to the SID authorization are entitled
to state-action immunity from federal antitrust liability. We
note that our conclusion that the City's ordinance is immune from
challenge under the federal antitrust laws does not imply that
the ordinance would violate those laws were immunity not
available. See Fisher v. City of Berkeley,
475 U.S. 260,
106 S.
Ct. 1045,
89 L. Ed.2d 206 (1986) (holding that restraint imposed
unilaterally by government does not violate section 1 of Sherman
Act because concerted-action element is lacking).
Finally we reject plaintiff's state antitrust claim.
N.J.S.A. 56:9-5c states that the New Jersey Antitrust Act (the
Act) "shall not apply to any activity directed, authorized or
permitted by any law of this State that is in conflict or
inconsistent with the provisions" of the Act. Therefore, a
necessary premise to plaintiff's state antitrust claim is that
Trenton's ordinance is not "directed, authorized or permitted" by
State law. Because we have concluded that the ordinance is
authorized by the SID statutes, see supra at __ (slip op. at 9-10), plaintiff's argument on this claim must fail. See Bally
Mfg. Corp., supra, 85 N.J. at 335.
In sum, Trenton's ban on independent peddlers within the SID furthers the policies of the SID statutes and is authorized by N.J.S.A. 40:56-77b(2). Furthermore, as a rational means of achieving the legitimate statutory objective of revitalizing downtown shopping districts, the ordinance survives both state and federal due-process and equal-protection challenges. Finally, because the city ordinance is authorized by the SID statutes and the anticompetitive effect of the ban is a foreseeable result of that authorization, the ordinance does not violate the state antitrust laws and constitutes state action that is immune from challenge under the federal antitrust laws.
The judgment of the Appellate Division is affirmed.
Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, and Garibaldi join in this opinion.
Footnote: 1 In June 1988, prior to the adoption of the ordinance prohibiting vending in the SID, Trenton had adopted Ordinance No. 88-39, which prohibited hawking, peddling, and vending throughout the City, except for eight discreet locations to which individual operators were to be assigned. Plaintiff challenged that ordinance and was granted temporary injunctive relief. The parties consented to continue that relief and subsequently Trenton stipulated that it would not enforce that ordinance and intended to repeal it. We do not consider the validity of that ordinance in this appeal.