(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 March 28, 2000 -- Decided June 13, 2000
O'HERN, J., writing for a unanimous Court.
In New Jersey Coalition Against War in the Middle East v. J.M.B. Realty Corp.,
138 N.J. 326 (1994), the
Supreme Court ruled that owners of shopping malls must permit leafletting and related political and societal speech
subject to reasonable time, place and manner restrictions. At issue in this appeal is the proper legal standard for
determining the reasonableness of such restrictions.
In 1996 and 1997, plaintiffs applied for permission to set up an information table, hand out leaflets, and
obtain signatures on behalf of a political party and its candidate at a local shopping mall. The mall's regulations: 1)
limited an applicant's activities to one day per year between January 1 and October 31 unless otherwise approved by
the mall management upon written request; 2) required applicants to provide a certificate of insurance in the amount
of $1,000,000; and 3) required applicants to sign a hold-harmless agreement indemnifying the mall for any claims or
losses, including costs and counsel fees incurred defending the claims. Plaintiffs obtained a quote for the insurance
certificate and found it prohibitive.
Plaintiffs' application to the Chancery Division for interim relief was granted, which enabled them to leaflet
the mall without obtaining the insurance certificate. Based on the Coalition Court's ruling that shopping malls are
de facto traditional public forums, the Chancery Division judge held that regulations affecting freedom of speech
should be narrowly tailored to promote a substantial business interest of the mall. Applying that standard, the court
found that all three of the mall's regulations were invalid.
The Appellate Division reversed,
324 N.J. Super. 192 (1999), finding that Coalition supported a
“reasonable business judgment” standard under which the malls would have broad powers to regulate the right to
leaflet. Under this standard, the three regulations at issue were upheld as reasonable means of protecting the mall's
property interests and precluding certain groups from dominating access to the mall. The Supreme Court granted
plaintiffs' petition for certification.
HELD: Neither the “narrowly tailored” test utilized by the Chancery court nor the “reasonable business judgment”
test applied by the Appellate Division are proper standards for determining the reasonableness of time, place and
manner restrictions on free speech in shopping malls. Instead, courts must balance the rights of citizens to speak and
assemble with the private property rights of mall owners by considering the factors of the nature and importance of
the affected right, the extent to which the restriction impedes that right, and the mall's need for the restriction.
1. In Coalition, the Court reiterated the test found in State v. Schmid,
84 N.J. 535, 563 (1980), for determining
whether private property owners may restrict the constitutional rights of speech and assembly. That test considered
“(1) the nature, purposes, and primary use of [the] property, . . .; 2) the extent and nature of the public's invitation to
use that property; and 3) the purpose of the expressional activity undertaken upon such property in relation to both
the private and public use of the property,” along with a general balancing of expressional rights versus private
property rights. Applying the Schmid test to regional shopping malls, the Coalition Court held that shopping malls
are the functional counterpart of downtown business districts and, as such, cannot prohibit leafletting and similar
political or societal free speech. However, the Coalition Court held that mall owners have broad power to impose
reasonable time, place and manner restrictions on such activities and explained that the limited free speech right at
shopping malls did not include bullhorns, megaphones, placards, pickets, parades, demonstrations and similarly
intrusive actions. (pp. 14-26)
2. Here, the Court finds that the “narrowly tailored” test utilized by the Chancery court, while appropriate for
limiting a government's intrusions into speech practiced in a public forum, is not applicable in evaluating regulations
imposed pursuant to the “broad” authority of a mall owner to protect private property. The Court also rejects the
Appellate Division's use of a “business judgment rule” that would provide immunity for business judgments made in
good faith based on reasonable business knowledge. Instead, the Court holds that the proper test for evaluating the
reasonableness of time, place and manner regulations by mall owners derives from the three-prong test in Schmid
along with a general balancing of expressional rights and private property interests. This balancing test recognizes
that the broad power of shopping malls to regulate the time, place and manner in which citizens may exercise their
right of free speech permits owners to minimize interference with the mall's commercial function without denying
leafleteers' interest in expressive speech. Such restrictions must be designed to achieve the mall's legitimate
purposes while preserving the leafleteer's rights. (pp. 26-32)
3. In considering the weight of the plaintiffs' political speech rights, the Court notes the “very high value” of
leafletting in political discourse. In weighing the countervailing harm mall owners may suffer, the Court considers
the nature and extent of risk posed by leafleteers and pamphleteers using objective factors including any prior history
of injury with this or related groups and any demonstration by the parties of actual cost or risk. Since the mall is
already faced with the risk of claims from its invitation to thousands of people per year to shop, the Court finds that
the primary question to be answered is “what additional risk to the mall owners is created by the occasional presence
of signature gatherers?” (p. 32-40)
4. On the record before the Court, the mall's $1,000,000 insurance certificate requirement lacks objective proof of
reasonableness and is therefore invalid. The Court further finds that the mall's requirement of a hold-harmless
agreement is linked to the insurance certificate requirement and is similarly unsupported by objective data. Since the
parties were attempting to agree on the number of days leafletting would be permitted, the Court does not rule on that
requirement, but states that more than one day per year will be reasonably required to protect the expressive right
involved. (pp. 40-45)
The judgment of the Appellate Division is REVERSED and the judgment of the Chancery Division is
REINSTATED as MODIFIED.
CHIEF JUSTICE PORTIZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, and
LaVECCHIA join in JUSTICE O'HERN's opinion.
SUPREME COURT OF NEW JERSEY
A-
59 September Term 1999
GREEN PARTY OF NEW JERSEY and
JAMES MOHN,
Plaintiffs-Appellants,
v.
HARTZ MOUNTAIN INDUSTRIES,
INC., d/b/a THE MALL AT MILL
CREEK,
Defendant-Respondent.
Argued March 28, 2000-- Decided June 13, 2000
On certification to the Superior Court,
Appellate Division, whose opinion is
reported at
324 N.J. Super. 192 (1999).
Frank Askin on behalf of the American Civil
Liberties Union of New Jersey argued the
cause for appellants.
Curtis L. Michael argued the cause for
respondent (Horowitz Rubino & Patton,
attorneys).
Bennet D. Zurofsky argued the cause for
amici curiae New Jersey Peace Action, New
Jersey Industrial Union Council, AFL-CIO and
New Jersey Labor Party (Reitman Parsonnet,
attorneys).
James M. Hirschhorn argued the cause for
amicus curiae International Council of
Shopping Centers (Sills Cummins Radin
Tischman Epstein & Gross, attorneys; Mr.
Hirschhorn and Jeffrey H. Newman, of counsel
and on the brief).
The opinion of the Court was delivered by
O'HERN, J.
In this appeal, plaintiffs seek access to a shopping mall in
order to gather signatures on behalf of a candidate for Governor
of the State of New Jersey. The appeal is a sequel to the
Court's ruling in New Jersey Coalition Against War in the Middle
East v. J.M.B. Realty,
138 N.J. 326 (1994), cert. denied, 516
U.S. 812 (1995) (Coalition).
In Coalition, the Court held that regional and certain
community shopping mall owners must allow on their premises
leafletting and associated political and societal speech,
subject to reasonable time, place, and manner restrictions. The
central question in this appeal is what legal standard should
determine the reasonableness of regulations governing the
exercise of free speech activities at those shopping centers.
In addition, the Court must apply this standard to three
regulations adopted by a shopping mall. The first regulation
requires non-profit organizations seeking to hand out leaflets
at the mall to provide a $1,000,000 insurance policy. The
second regulation requires those wishing to hand out leaflets to
sign a “hold harmless” clause as a condition of having access to
the mall. The third regulation requires organizations to limit
their access to the mall to “one day, or a few days a year.”
Not before us are the issues that divided the Coalition Court.
Our extended discussion of the Coalition decision is intended
only to aid in our review of the application of its principles
by the courts below to the issues at hand.
The Chancery Division held that malls may impose reasonable
content-neutral time, place, and manner restrictions on free
speech. Because the Coalition Court found regional shopping
centers to be de facto traditional public forums, the Chancery
Division ruled that regulations of expressive activities should
be narrowly tailored to promote a substantial business interest
of the mall. In applying this standard, the Chancery Division
invalidated all three of the mall regulations. On appeal, the
Appellate Division reversed.
324 N.J. Super. 192 (1999).
Interpreting language in Coalition, the court adopted a
“reasonable business judgment” standard that granted the mall
broad powers to regulate the limited free speech right to
leaflet. Applying this test, the panel upheld all three
regulations as good faith means of protecting the mall's private
property interests and preventing certain groups from
monopolizing access to the mall. We granted certification,
163 N.J. 12 (2000), and now reverse.
I.
The case arises as a test case following the grant of
interim relief during the 1996 and 1997 election cycles. Both
courts held, and we agree, that the issues are recurring and
deserve review although technically moot. Some of the evidence
in the case came from affidavits filed in connection with the
applications for emergency relief, some came at a plenary
hearing in the Chancery Division, and some by later
stipulations. There is no basic disagreement over the facts.
Because the Appellate Division provided a thorough discussion of
the facts, only a summary follows.
A.
James Mohn, a resident of Guttenberg, had been actively
involved with the New Jersey Draft Nader for President Committee
(“Nader Committee”) in 1996 and thereafter with the Green Party
of New Jersey. He also participated in membership and voter
registration drives and leafletting for other organizations,
including the New Jersey Peace Action, Witness for Peace, the
Arab-American Anti-Discrimination Committee, and the Rainbow
Coalition.
The Mall at Mill Creek (“Mall”) is owned by Hartz Mountain
Industries and is located in Hudson County. Because nearby
Bergen County enforces “blue laws,” Mohn considered soliciting
petition signatures at the Mall important as numerous Bergen
County residents would visit the Mall on Sundays. In addition,
he believed that the Mall was a gathering place for large
numbers of people on other days of the week, an enclosed area
that was preferable during bad weather, and near his home.
Approximately three times a week, Mohn and his wife went to the
Mall as “Merry Milers” to walk for exercise in the mornings.
The Mall contains about 325,000 square feet of “gross
leasable area,” but only approximately 35,000 square feet of
common area open to the public. In Coalition, the Law Division
described the Mall as a community shopping centerSee footnote 11 situated on
twenty-seven acres of land in Secaucus, located near the New
Jersey Turnpike Exit 16E and Route 3. The Mall has three public
entrances and a single-floor layout, which is roughly a straight
line passageway between two anchor stores. Both ends and sides
of the Mall are lined by stores, with enlarged common areas at
each end and midpoint. Kiosks, carts, and tables fill a narrow
band of common area at the center of the passageway and in the
three enlarged areas.
In September 1996, Mohn requested space to set up an
information table at the Mall on behalf of the Nader Committee.See footnote 22
In response, the Mall sent Mohn a copy of its license agreement
and regulations, which provided in part:
The following comprise the regulations of the
Mall at Mill Creek for informational
activities of non-profit organizations,
individuals, or entities (collectively
“Permittee”). The Mall at Mill Creek has
afforded reasonable access for community and
non-profit groups desiring to use the Mall
for informational activities. However,
informational activities must be conducted in
a manner so as not to disturb Mill Creek's
customers or tenants. Mill Creek reserves
the right to change these rules at any time.
1. Activities are generally limited to
one day per year between January 1 and
October 31, unless otherwise approved by
Mall Management upon written request.See footnote 33
10. Permittee must sign the enclosed License Agreement.
The license agreement further provided:
Licensee shall protect, indemnify, save and keep harmless Licensor against any and all claims, loss, cost, damage or expense of any kind or nature, whatsoever, arising out of or from (i) any accident or occurrence in, on or at the Premises, and (ii) any act or omission of Licensee, its employees, servants, agents or invitees. In the event the Mall or Hartz shall, without fault on its part, be made a party to any litigation commenced by or against Licensee, Licensee shall protect and hold the Mall and Hartz harmless and shall pay all costs, expenses and reasonable attorneys' fees incurred or paid by the Mall or Hartz in connection with such litigation.
On October 14, 1996, Mohn received a quotation of $665 from an insurance agency for $1,000,000 in liability insurance for the Nader Committee. Believing that the costs were prohibitive, Mohn and the Nader Committee filed suit and obtained an order that allowed them to leaflet at the Mall on October 27 without providing an insurance certificate. When Mohn leafletted at the Mall in 1996 for the Nader Committee, there were no incidents.
B.
In March 1997, Mohn was in the process of organizing the
Green Party of New Jersey. On January 25, 1997, the Party was
established at a meeting of about forty people, most of whom had
been members of the Nader Committee, at the Rutgers Labor
Education Center in New Brunswick.See footnote 44 After the formation of the
Green Party, plaintiffs amended their complaint to replace the
Nader Committee with the Green Party as plaintiff. The Green
Party then sought to obtain 2,000 ballot signatures on its
nominating petition for its gubernatorial candidate in 1997.
While seeking signatures for the petition in other
locations, Mohn had handed out a flier that described the Green
Party, its candidate, and positions. If granted access, Mohn
intended to use that document in his leafletting and collection
of petition signatures at the Mall.
Richard Lofberg, a licensed property and casualty
underwriter, a witness for the Mall, explained that shopping
centers require insurance of their tenants and vendors for these
reasons:
A mall is open to the public, it is a private
location, a private site, because it is a
private site the owner of that property is
literally fully exposed to anything that
happens, the slip and falls in shopping malls
are horrendous, the rights of protection are
really somewhat limited, considering what can
happen there . . . .
Lofberg stated that insurance was available for such risks, and
that when a group is financially strong enough to carry part of
that risk itself, it can use a “self-insured retention,” also
called a high deductible, to lower its insurance costs on a per
claim or a per period basis. Lofberg also observed that the
Nader Committee's insurance quotation did not contain a policy
provision limiting the leafletting activities to one day, so that
the $500 premium cost (plus $165 in taxes and fees) appeared to
contemplate coverage for a full year at the Mall. He said that
coverage for only one day would be rated differently.See footnote 55
According to the Mall's Director of Insurance and Risk
Management, the Mall's regular tenants were required to have
insurance coverage at policy limits of $5,000,000 per occurrence,
and the leases usually had a hold harmless provision. She noted
that Hartz had a $1,250,000 per occurrence deductible and
supplied a three-page listing of claims that the Mall had
experienced for incidents that occurred between September 1993
and June 1996, which with expenses totaled $497,507.38.
Plaintiffs dispute that claims made equate with claims paid.
Most of the claims were for less than $35,000 each. There were
two large claims in 1993 that totaled $220,000 and $101,030,
respectively.
C.
The Chancery Division reviewed free speech guarantees of the
United States and New Jersey Constitutions and the Coalition
decision. The court also reviewed four California cases that
concerned similar shopping mall restrictions.See footnote 66 The court
interpreted those cases as applying the same standard that the
United States Supreme Court applies to governmental restrictions
on freedom of speech in a traditional public forum, namely that
the government may impose reasonable content-neutral time, place
and manner restrictions, but those restrictions must be narrowly
drawn to promote its substantial interests. The Chancery
Division adopted that standard for reviewing regulations imposed
by private shopping malls in New Jersey, interpreting the
rationale of Coalition as a holding that in New Jersey a shopping
mall is a de facto traditional public forum.
The court considered the insurance requirement
cost-prohibitive given the Party's limited funds. The court
speculated that splinter political groups are often unable to
secure insurance at any price and that the requirement was
unnecessary because the Mall would not be vicariously liable for
the conduct of the Green Party. The insurance requirement might
also raise other constitutional issues, particularly if
underwriters consider such matters as the political beliefs of
applicants, the likelihood of adverse publicity to the insurer,
the lack of business experience of the group, and other factors
that are irrelevant or improper. Eastern Conn. Citizens Action
Group v. Powers,
723 F.2d 1050, 1056 n.2 (2d Cir. 1983). The
court concluded that because the insurance and hold harmless
requirements were intertwined, they were unconstitutional “as a
de facto ban on free[dom of] speech because compliance, if
achievable, is cost prohibitive.”See footnote 77
D.
The court ruled that the Chancery Division applied the wrong standard, the “narrowly tailored” test, because the court had equated shopping malls with traditional public forums. Instead, the Appellate Division held that the Mall's regulations should have been evaluated under a “reasonable business judgment” standard. The Appellate Division extensively summarized the Coalition opinion, observing the limited nature of the free speech right and the broad power of the malls to regulate the exercise of the free speech right. Id. at 214-17.
In creating its standard for reviewing a shopping center's regulations of free speech activities, the panel applied this test:
(1) Is the regulation a reasonable means for assuring a private business, operating as a regional shopping center, that the constitutionally permitted freedom of speech activity does not interfere with the shopping center's business? In other words was the regulation a reasonable exercise of business judgment? (2) Applying the regulation to the circumstances presented, is the effectiveness of the applicant's proposed exercise of freedom of speech rights sufficiently maintained?
II.
In Schneider v. State, 308 U.S. 147, 60 S. Ct. 146, 84 L. Ed. 155 (1939), the Supreme Court reviewed an Irvington, New Jersey canvassing ordinance that required written permission from the chief of police for any form of door-to-door activities. Speaking for the Court, Justice Roberts wrote:
This court has characterized freedom of speech and that of the press as fundamental personal rights and liberties. The phrase is not an empty one and was not lightly used. It reflects the belief of the framers of the Constitution that exercise of the rights lies at the foundation of free government by free men. It stresses, as do many opinions of this court, the importance of preventing the restriction of enjoyment of these liberties.
“There is no doubt [then] that as a general matter, peaceful picketing and leafletting are expressive activities involving 'speech' protected by the First Amendment.” United States v. Grace, 461 U.S. 171, 176, 103 S. Ct. 1702, 1706, 75 L. Ed.2d 736 (1983); Carey v. Brown, 447 U.S. 455, 460, 100 S. Ct. 2286, 2290, 65 L. Ed.2d 263 (1980); Thornhill v. Alabama, 310 U.S. 88, 60 S. Ct. 736, 84 L. Ed. 155 (1940); Lovell v. City of Griffin, 303 U.S. 444, 58 S. Ct. 666, 82 L. Ed. 949 (1938). Had Mohn sought to collect signatures for Ralph Nader on a Secaucus street or park, he would have been free to do so.
B.
At one time private property owners exercised virtually
unfettered control over property. As social standards changed,
the law changed to recognize the primacy of certain public
interests over the rights of private property owners. In Marsh
v. Alabama,
326 U.S. 501,
66 S. Ct. 276,
90 L. Ed. 265 (1946),
the Court recognized that public interests could control not only
what a landowner could do with its property (as through zoning
laws) but also the owner's freedom to exclude or limit the
conduct of the public on that property. Police had arrested
Grace Marsh and others who had been distributing religious
pamphlets outside the post office of a privately owned “company
town.” Id. at 503-04. Had Marsh been in any other town, the
sidewalk near the post office would have been public property,
and she would have had a First Amendment right to express herself
freely on that public property. Focusing on the “fundamental
liberties” of disseminating and receiving ideas, the Supreme
Court held that the pamphleteers' constitutional rights had been
abridged. It concluded that, except for ownership by a private
corporation, the company town “has all the characteristics of any
other American town.” Id. at 501. Although acknowledging the
significance of the property rights involved, the Court found it
necessary to balance against those rights the constitutional
right of free expression. The Court discussed the historical
importance of town centers as a forum for the free exchange of
ideas and information. No other location gives speakers the
opportunity to convey their messages to their fellow citizens.
People traveled from residential areas to the town center,
rendering it the only forum in which a resident could communicate
with other fellow citizens. The Marsh Court concluded that “when
we balance the Constitutional rights of owners of property
against those of the people to enjoy freedom of press and
religion . . . we remain mindful of the fact that the latter
occupy a preferred position.” Id. at 509.
In the years that followed Marsh, living patterns changed
further. Suburban areas increased, and the suburban mall became
the new town center. In Robins v. Pruneyard Shopping Center,
23 Cal.3d 899,
153 Cal. Rptr. 854 (Cal. 1979), aff'd,
447 U.S. 74,
100 S. Ct. 2035
64 L. Ed.2d 741 (1980), the California Supreme
Court interpreted the State's constitution to guarantee the right
of free expression in shopping centers and on comparable
property. The Pruneyard court acknowledged that the First
Amendment did not grant such broad protection, but it found that
California could grant that protection. The court observed that
property rights must yield to the public interests served by
zoning laws, environmental laws and other legislation that limit
the precise uses to which private property may be put. The
Pruneyard court was persuaded that “all private property is held
subject to the power of the government to regulate its use for
the public welfare.” Id. at 857. It concluded that the state
had the power consistent with the Constitution to grant that
greater protection: “a handful of additional orderly persons
soliciting signatures and distributing handbills in connection
therewith, under reasonable regulations adopted by defendant to
assure that these activities do not interfere with normal
business operations would not markedly dilute defendant's
property rights.” Id. at 860-61 (citation omitted).
The United States Supreme Court agreed. Robins v. Pruneyard
Shopping Center,
447 U.S. 74,
100 S. Ct. 2035,
64 L. Ed.2d 741,
(1979). It held that states may adopt greater free speech rights
than those guaranteed by the First Amendment. Id. at 80-81.
Responding to the mall's argument that California's ruling
amounted to a taking, the Court found that permitting speech did
not so diminish the property's value as to be an unconstitutional
infringement. Id. at 82-85. Finally, responding to the mall's
claim that the California ruling essentially forced it to use its
property to further the speaker's interests, the Court observed
that the mall had chosen to invite the public, could easily
disavow the message, and that, further, since the state
government was not requiring that any particular message be
conveyed, there was no danger of government discrimination. Id.
at 86-89.
C.
As in California, free speech is protected in New Jersey by
the State Constitution, as well as the Federal Constitution.
Article 1, paragraph 6, of the New Jersey Constitution provides:
Every person may freely speak, write and
publish his sentiments on all subjects, being
responsible for the abuse of that right. No
law shall be passed to restrain or abridge
the liberty of speech or of the press. In
all prosecutions or indictments for libel,
the truth may be given in evidence to the
jury; and if it shall appear to the jury
that the matter charged as libelous is true,
and was published with good motives and for
justifiable ends, the party shall be
acquitted; and the jury shall have the right
to determine the law and the fact.
In addition, article 1, paragraph 18 of the New Jersey Constitution provides: “The People have the right freely to assemble together, to consult for the common good, to make known their opinions to their representatives, and to petition for redress of grievances.” N.J. Const. art. 1, ¶ 18. Although the federal constitutional right to free speech protects against unreasonably restrictive or oppressive conduct on the part of government entities, the right to free speech under the New Jersey Constitution also guards against unreasonably restrictive or oppressive conduct of private parties “that have otherwise assumed a constitutional obligation not to abridge the individual exercise of such freedoms because of the public use of their property.” State v. Schmid, 84 N.J. 535, 560 (1980), appeal dismissed sub. nom. Princeton University v. Schmid, 455 U.S. 100, 102 S. Ct. 867, 70 L. Ed.2d 855 (1982).See footnote 88 Similarly, in State v. Shack, 58 N.J. 297 (1971), the Court had held that although an employer of migrant farm workers “may reasonably require” those visiting his employees to identify themselves, “the employer may not deny the worker his privacy or interfere with his opportunity to live with dignity and to enjoy associations customary among our citizens.” Id. at 308. The Court reversed the trespass convictions of an attorney and a social services worker who had entered the owner's property to assist farm workers there.
In Coalition, supra, the Court first addressed the question of whether the New Jersey Constitution's guarantee of freedom of speech permitted persons or groups to distribute leaflets at a group of suburban shopping malls. The Court declined to follow cases that had found no general right to freedom of speech in privately owned shopping centers. Coalition, supra, 138 N.J. at 349-352. Writing for the Court, Chief Justice Wilentz recognized that “[a]lthough the ultimate purpose of these shopping centers is commercial, their normal use is all-embracing, almost without limit, projecting a community image, serving as their own communities, encompassing practically all aspects of a downtown business district, including expressive uses and community events.” Id. at 333. The Court asserted that these shopping centers have “significantly displaced downtown business districts as the gathering point of citizens.” Id. at 344. Chief Justice Wilentz concluded, “[t]hus, malls are where the people can be found today.” Id. at 345.
The Coalition Court recalled that in Schmid, supra, 84 N.J. at 563, the standard for balancing private property interests and expressive activities must take into account:
(1) the nature, purposes, and primary use of such private property, generally, its “normal” use, (2) the extent and nature of the public's invitation to use that property, and (3) the purpose of the expressional activity undertaken upon such property in relation to both the private and public use of the property.
The Court stated that this analysis “must be applied to ascertain whether in a given case owners of private property may be required to permit, subject to suitable restrictions, the reasonable exercise by individuals of the constitutional freedoms of speech and assembly.” Ibid.
Applying the first two parts of that test, the Coalition Court stated:
The regional and community shopping centers have achieved their goal: they have become today's downtown and to some extent their own community; their invitation has brought everyone there for all purposes. Those purposes in fact--regardless of their clear subjective profit motive--go far beyond buying goods; they include not only expressive uses but so many different uses without any commonality other than the mix of uses that define a community, and in terms of the centers' motivation, almost anything that will bring people to the centers. This is the new, the improved, the more attractive downtown business district--the new community--and no use is more closely associated with the old downtown than leafleting. Defendants have taken that old downtown away from its former home and moved all of it, except free speech, to the suburbs. In a country where free speech found its home in the downtown business district, these centers can no more avoid speech than a playground avoid children, a library its readers, or a park its strollers.
In applying the third part of this test, the Court added:
These centers have full power to minimize whatever slight discordance might otherwise exist; full power to adopt rules and regulations concerning the time, place, and manner of such leafleting, regulations that will assure beyond question that the leafleting does not interfere with the shopping center's business while at the same time preserving the effectiveness of plaintiff's exercise of their constitutional right.
The Coalition Court decided the case not only on the basis of the three-pronged test in Schmid, but also on a more general balancing of expressional rights and private property rights. On one side, the Court weighed private property owners' interest in controlling and limiting activities on their property in light of the uses permitted and invited on the property. Id. at 363. The Court recognized that
[t]he private property owners in this case, the operators of regional and community shopping centers, have intentionally transformed their property into a public square or market, a public gathering place, a downtown business district, a community . . . The sliding scale cannot slide any farther in the direction of public use and diminished private property interests.
On the other side of the balance, the Court weighed the plaintiff's free speech interest as “the most substantial in our constitutional scheme.” Ibid. The Court concluded that any interference with the shopping mall's rights would be “negligible” and that the risk of damaging the mission of these shopping mall's was “practically non-existent.” Id. at 364. Recalling Shack, supra, 58 N.J. at 306, the Court stated that “in necessitous circumstances, private property rights must yield to societal interests and needs, that there must be an 'accommodation between the right of the owner and the interests of the general public.'” Id. at 365. Therefore, the Court ruled that “where private ownership of property that is the functional counterpart of the downtown business district has effectively monopolized significant opportunities for speech, the owners cannot eradicate those opportunities by prohibiting it.” Id. at 366.
Because the New Jersey's Constitution's free speech provision is an affirmative right, broader than practically all others in the nation, the Court held that “if the people have left for the shopping centers, our constitutional right includes the right to go there too, to follow them, and to talk to them.” Id. at 369.
The Coalition Court limited its holding “to leafletting and associated speech in support of, or in opposition to, causes, candidates, and parties--political and societal free speech.” Id. at 374. This limited free speech right “does not include bullhorns, megaphones, or even a soapbox; it does not include placards, pickets, parades, and demonstrations; it does not include anything other than normal speech and then only such as is necessary to the effectiveness of the leafletting.” Id. at 376-77. The Court concluded: “The centers' power to impose regulations concerning the time, place, and manner of exercising the right of free speech is extremely broad . . . . Certainly no individual or group will be entitled to be present any more often than is necessary to convey the message.” Id. at 377-78.
What Standard Should Govern the Reasonableness of a Mall's Regulations of Time, Place, and Manner of Expressive Activities?
A.
This case presents the opposite balance. It involves governmental regulation of private property to enable the exercise of free speech rights. The narrowly tailored standard does not appear to fit.
B.
We disagree, however, that the business judgment rule is the
proper standard. Use of that standard evokes a familiar memory.
In 1952, Charles Wilson, a former chief executive officer of
General Motors who served as a member of President Eisenhower's
Cabinet, remarked of business judgment that “[w]hat is good for
the country is good for General Motors, and what's good for
General Motors is good for the country.” U.S. v. Dethlefs,
123 F.3d 39, 45 n.5 (1st Cir. 1997). We are not so certain that what
is good for mall owners is good for the country, or, in this
case, good for the citizens of New Jersey who seek to exercise
their free speech rights. The amicus brief of the International
Council of Shopping Centers has recognized as much and not urged
that we adopt the business judgment rule as the standard to
measure restraints on free speech by a mall operator.
The business judgment rule has its roots in corporate law as
a means of shielding internal business decisions from second
guessing by the courts. Courts at Beachgate v. Bird, 226 N.J.
Super. 631, 641 (Ch. Div. 1988). Under the rule, when business
judgments are made in good faith based on reasonable business
knowledge, the decision makers are immune from liability from
actions brought by others who have an interest in the business
entity. Sarner v. Sarner,
62 N.J. Super. 41, 60 (App. Div.
1960). The business judgment rule generally asks (1) whether the
actions were authorized by statute or by charter, and if so, (2)
whether the action is fraudulent, self-dealing or unconscionable.
Thanasoulis v. Winston Towers Ass'n, Inc.,
110 N.J. 650, 666
(1988) (Garibaldi, J. dissenting); Siller v. Hartz Mountain
Assoc.,
93 N.J. 370, 382, cert. denied,
464 U.S. 961,
104 S. Ct. 395,
78 L. Ed.2d 337 (1979).
The business judgment rule has limited relevance in this
context. The Green Party is not involved in business dealings
with the Mall, nor is it seeking redress of rights owing to it as
a consequence of share ownership. Instead, the Green Party seeks
to enforce a constitutionally guaranteed right to distribute
literature and collect signatures in a shopping mall.
The relationship between a board of directors and
shareholders is simply not relevant here. Once a business entity
has concerns outside its doors it must contend with the needs and
rights of all citizens. Coalition held that there are certain
rights that citizens of New Jersey enjoy that must be protected
against encroachment, whether that encroachment comes from the
public or private sector. Coalition, supra, 138 N.J. at 363-64.
The business judgment rule cannot be used to determined the
reasonableness of time, place, and manner regulations of free
speech in New Jersey's new “downtown business districts.” Id. at
335.
C.
Rather, we believe that the test to be applied is to be
derived from the principles of Coalition that relied not only on
the three-prong test in Schmid, but also on a general balancing
of expressional rights and private property interests. The Court
recognized that
[a]s private property becomes, on a sliding
scale, committed either more or less to
public use and enjoyment, there is actuated,
in effect, a counterbalancing between
expressional and property rights.
[T]he more an owner, for his advantage, opens
up his property for use by the public in
general, the more do his rights become
circumscribed by the statutory and
constitutional rights of those who use it.
[Id. at 363 (citations omitted).]
New Jersey has generally avoided classifying cases into
different tiers for purposes of constitutional analysis. Justice
Clifford once remarked that such elaborate analytical structures
have a tendency to create “a veil of tiers which shrouds [the]
essential issue.” Matthews v. Atlantic City,
84 N.J. 153, 175
(1980) (Clifford, J., dissenting). Rather than to slot cases
into tiers of strict scrutiny or narrow tailoring, we have
attempted in constitutional analysis to balance the competing
interests, giving proper weight to the constitutional values.
Thus, in balancing the interests of abortion protesters to picket
with the private property rights of physicians to residential
privacy, we sought to protect the constitutional rights of each.
Murray, supra, 138 N.J. at 232. Here, we must also balance the
rights of citizens to speak and assemble freely with the private
property rights of mall owners.
In striking this balance, we must consider the nature of the
affected right, the extent to which the mall's restriction
intrudes upon it, and the mall's need for the restriction.
Greenberg v. Kimmelman,
99 N.J. 552 (1985) (applying similar
balancing test in context of equal protection and due process
claims involving employment rights). The more important the
constitutional right sought to be exercised, the greater the
mall's need must be to justify interference with the exercise of
that right. Shack, supra, 58 N.J. at 307 (discussing needs of
migrant workers to be informed of their rights as outweighing
private property interests of employer).
Although the Coalition Court declined to rule on the
regulations then at issue, it provided evidence that such rules
were to be tested by a standard similar to that used in other
forum cases involving public space. The Court stated:
It is the extent of the restriction, and the
circumstances of the restriction that are
critical, not the identity of the party
restricting free speech. Were the government
ever to attempt to prohibit free speech in
the downtown business district, without doubt
our Constitution would prohibit it, and in
New Jersey when private entities do the same
thing at these centers, our Constitution
prohibits that too.
IV.
In considering the weight of the Green Party's expressional
rights, attention must be paid to the nature of the rights
involved. Historically, centers of commerce have been meeting
places for those who wish to speak, write, or exchange ideas.
“In the Athenian Agora and the Roman Forum, on the London streets
and colonial village greens, the public ways and gathering
places, men [and today we would add women] learned the strength
and wisdom of free discussion.” Police Commissioner of Baltimore
City v. Siegel Enterprises, Inc.,
223 Md. 110, 128 (1960).
There is a strong correlation between a free market in goods
and a free market in ideas.
[Our] description of the theory of freedom of
speech is based on an analogy to the economic
market. Indeed, the dominant metaphor for
“freedom of the press” throughout most of
this century has been the “marketplace of
ideas.” The metaphor is based on the
assumption that “the truth” will always win
in a free and open encounter with falsehood.
It is also based on a classic model of
freedom of speech built upon the image of
“soapbox orators” or individual pamphleteers
who tried to reach their audiences.
[Alberto Bernabe Riefkohl, Freedom of the
Press and the Business of Journalism: The
Myth of Democratic Competition in the
Marketplace of Ideas,
67 Rev. Jur. U.P.R. 447
(1998) (footnotes omitted).]
We would have hoped that mall owners would sense the
connection between the colonial pamphleteers who secured our
liberties and the pamphleteers who today seek access to the new
forums of commerce. At the same time it is encouraging that the
exchange of discordant views perpetuates the classical model of
freedom that we pursue.
In this case, we are concerned with the right of persons to
hand out fliers and solicit signatures in support of a
candidate's nomination to public office. The Supreme Judicial
Court of Massachusetts has described the paramount importance of
this expressive activity:
Ballot access is of fundamental importance in
our form of government because through the
ballot the people can control their
government.... The difference between free
speech and . . . rights to free elections and
to be a candidate equally with others is not
purely theoretical. Ideas and views can be
transmitted through the press, by door-to
door distributions, or through the mail
without personal contact. On the other hand,
a person needing signatures for ballot access
requires personal contact with voters. He or
she cannot reasonably obtain them in any
other way. Reasonable access to the public
is essential in ballot access matters.
[Batchelder v. Allied Stores International,
Inc.,
388 Mass. 83, 92 (1983) (citations
omitted).]
Throughout much of New Jersey today there is no place to go,
other than shopping centers and regional malls, if one is to have
an opportunity to meet face-to-face with large groups of people
in order to interest them in an issue by handing them a leaflet
or asking them to sign a petition. Except for those commercial
centers, the public common has largely ceased to exist. Most
businesses in the state are conducted in facilities surrounded by
parking lots far from the public streets.
Leafletting continues to be, as it has for generations, one
of the few effective means of actually meeting a large number of
fellow citizens. Because leaflets can be produced easily and
inexpensively by almost anyone, they have been a favored means of
such personal communication. A leafleteer with only a few
dollars and a few hours can reach hundreds of people in a
community if that leafleteer stands where most people are
located. The Internet, cable television, and newer forms of
media are of no help in this process. Leafletting also enables
an organization to respond quickly to current events and provides
a personal message that the leafleteer stands for the cause.
In addition, a leafleteer is likely to be required to engage
in leafletting more than once a year, either because of a need to
reach more people or because of the simple facts of political
life, such that a candidate must not only seek public support to
get on the ballot but must also seek votes when the election is
held, and that issues change with time and events. Leafletting
in heavily visited shopping areas therefore has a very high value
in our system of political discourse. Putting too high a price
on the exercise of that freedom may destroy it.
In a long series of cases, the Supreme Court has held that
governmental fees imposed as a condition of speech, are
constitutionally suspect. In Forsythe County, Ga. v.
Nationalist Movement,
505 U.S. 123,
112 S. Ct. 2395,
128 L. Ed.2d 101 (1992), the Court ruled that because a county ordinance
imposing a fee for a parade permit provided no articulated
standards or objective factors to guide the administrators'
decision, the requirement was invalid. The late Professor Eric
Neisser summarized these standards in his article, Charging for
Free Speech: User Fees and Insurance in the Marketplace of Ideas,
74 Geo. L.J. 257 (1985).
In H-CHH Assocs. v. Citizens for Representative Gov't,
193 Cal. App.3d 1193,
238 Cal. Rptr. 841, review denied (Oct. 29,
1987), cert. denied, 485 U.S. 971, 108 S. Ct. 1248,
99 L. Ed.2d 446 (1988), the California Court of Appeals considered a rule
that conferred upon mall management the discretion to determine
whether proposed political petitioning created a risk of injury
or damage to person or property that required special insurance
protection, which the applicant must then provide. The panel
stated that “'[r]isk of injury' is yet another general and
subjective standard vulnerable to arbitrary or content related
determination. It is closely akin in value as a standard to
'danger to public'; in a word, it is fatally defective.” Id. at
857 (citing Hague v.CIO,
307 U.S. 496, 516,
59 S. Ct. 954, 964,
83 L. Ed. 1423 (1939)). The court concluded:
Neither is there any indication as to how
management is to determine whether the risk
warrants special insurance protection. In
its totality, [the mall's insurance
requirement] is unconstitutionally overbroad.
Once again it is possible for plaintiffs
to craft the necessary objective criteria,
i.e.: (1) Whether there is a prior history of
injury to persons or property when this group
engages in expressive activity; (2) whether
there is a prior history of injury to persons
or property when similar groups engage in
expressive activity; (3) the historical scope
of the risk and whether it exceeds the
minimal or inconsequential; (4) whether the
risk can be lessened or eliminated by
adjusting the time, date, place or planned
manner of expression; and (5) if so, whether
the applicant is willing to make such
adjustments....
These requirements for information, if met, would allow us to consider whether any legitimate business interests of the mall have been infringed or threatened by the expressive political activity. In Union of Needletrades, Indus. & Textile Employees v. Superior Court, 56 Cal. App. 4th 996, 65 Cal. Rptr.2d 838 (1997), a different panel of the court sustained a requirement that an applicant submit information that would enable objective determination of whether such risks would be presented.
In weighing the harm that mall owners may suffer, we must consider the nature and extent of the risk posed by leafleteers and pamphleteers. The United States Supreme Court and the California courts have suggested, and we agree, that the analysis should focus on objective factors. In this case, there has been no prior history of injury when this or any related group engaged in expressive activity or demonstration of the actual cost of the risk. (Of course, an organization with a demonstrated history of provoking violent reaction might pose special problems that we do not attempt to resolve here.) As evidence of the risk that may be posed by leafleteers, the Mall provided a list of claims made against it. The majority of those were from “slip and fall” cases and falling shop racks. The Green Party sought to show that the vast majority of those injuries had occurred when people were working with liquids, operating machinery, or displaying their wares on movable racks. Simply put, it contended that offering a piece of paper to a passing customer does not pose a similar danger to those found in slip and fall cases.
In fact, the Mall's insurance expert explained that the claims filed against the Mall were below average in the industry. As noted, plaintiff insists that the incidents involved claims made, not payments made by the Mall, or any other party. Concerning the scope of the risk, as we understand the record, the Mall has a $1,250,000 per occurrence deductible. That means that the Mall is prepared to accept, as part of its general invitation to the thousands of people per year who come on the mall premises, the risk that they might, through their activities, create a dangerous condition of property affecting others. (Plaintiff's counsel estimated the number at as many as one million people per year). The question is: what additional risk to the mall owners is created by the occasional presence of the signature gatherers?
At oral argument, we explored with counsel the suggestion that a single event liability insurance policy would be less expensive than a yearly policy. The premium quoted was $250. We understand that such a premium, as with most types of insurance policies, reflects expected losses plus expenses. There are certain fixed transactional expenses common to all policies, whether coverage exists for a day, several days, or a year. Fixed transactional expenses may include the costs of the administrative process in taking an application for coverage, and compensation for the agent taking the application, if not a full commission paid to the agent. The costs of underwriting to assess the application for coverage must also be included, as well as the necessary expenses associated with policy issuance and providing evidence of coverage. All these expenses are included as part of the premium amount quoted for either a single event liability policy or liability coverage for a full year.
In the case of a single event liability policy, the transactional expense factors represent a higher portion of total premium. Ordinarily these transactional expenses would be spread over a longer period of coverage, such as a year. With single event liability coverage however, the transactional expenses for coverage for a single day or a single event over several days may appear to be disproportional compared to a policy issued for a full year, but that is inevitable in the process. Thus, if the leafleteers were to wish to exercise their rights on more than one occasion (e.g., at primaries and at general elections), the single event liability policy would provide no real savings. In addition, because leafleteers often distribute their literature in response to changing current events, the costs associated with a single event liability policy could quickly out-pace those of a yearly policy.