Daily Development for Thursday, December 21, 2000

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

CONSTITUTIONAL LAW; FREE SPEECH; SHOPPING CENTERS: Pruneyard is bare. Free speech rights do not apply to "big boxes," even really big boxes.

Waremart, Inc. v. Progressive Campaigns, Inc., 2000 WL 1844777 (Cal.App. 12/18/00)

Most real estate lawyers know the Pruneyard issue whether a shopping center has become a functional replacement of the town plaza and therefore owes an obligation to facilitate communication by parties desiring to reach the public through free speech activities. The Supreme Court has held that there is no such duty under the First Amendment of the U.S. Constitution (Lloyd Corp. v. Tanner, 92 S.Ct. 2219 (1972)), but the California Supreme Court, in Robins v. Pruneyard Shopping Center, 153 Cal. Rptr. 854 (Cal. 1979) and a number of other jurisdictions, have found that the duty exists under the state constitutional guarantees of free speech. The U.S. Supreme Court, in affirming Pruneyard, indicated that if the state constitutions do so require, there is no infringement on the private property rights of the center owners.

But a question that has bedeviled many courts since the Pruneyard decision in 1979 has been the nature of the private retail establishment that fits within the "shopping center" standard and must facilitate free speech. The California Pruneyard decision itself cited to an earlier California case, In re Lane, that held that free speech rights existed where a labor union was attempting to picket outside of a large grocery store, suggesting that free standing single purpose retail establishments, having none of the complexity, public entertainments, and gathering areas that might exist in a mall, might still have an obligation to provide access to parties interested in exercising speech rights. Lane concluded that a landowner of a substantial premises could not insulate its customers from speech activities by surrounding itself with a band of private property from which all speech activities are barred.

Lane itself relied upon the First Amendment, and was discredited on this ground when the U.S. Supreme Court in the Lloyd Center case held that the U.S. Constitution does not create free speech rights in shopping centers. But many saw the California Supreme Court's later citation of Lane in its decision in Pruneyard as a validation of the Lane reasoning for purposes of the California state constitution. Pruneyard acknowledged that it did not have application to "modest retail establishments," but did not limit itself strictly to major shopping malls.

Indeed, in a case reported on DIRT four years ago, a California Court of Appeals decision suggested that this treatment of Lane in Pruneyard indicated that the Pruneyard rule applied to landowners other than those operating full service shopping malls: "Whatever 'modest retail establishment means' it does not include a large shopping center and, in light of In re Lane, it also does not include a 'large "supermarkettype" grocery store.'" Bank of Stockton v. Church of Soldiers of Christ, 52 Cal. Rptr. 2d 429 (Cal. App. 1996). (Bank may prohibit religious solicitations on private sidewalk between parking lot and 30,000 square foot headquarters building.) DIRT reported the Bank of Stockton case as the DD for 9/19/96 (note that, at least in the original report, the editor missed the critical dicta regarding Lane reported above.

Subsequently, in Trader Joes' Company v. Progressive Campaigns, 86 Cal. Rptr. 2d 442 (Cal. App. 1998), the same California Court of Appeals concluded that a ten thousand square foot grocery and retail store is not so central to the societal interest in free speech as to apply the Pruneyard rule and impose a duty upon the landowner to accommodate political speech on premises. The court had difficulty with distinguishing Lane and ultimately did so by stressing the fact that Lane involved a special kind of speech labor protests relating to the owner's activities on the premises itself. "The [Lane] court's reasoning was substantially influenced by this fact and the need to prevent the defendant from insulating himself from public comment for his role in the labor dispute." In the DD for 7/9/99, the editor criticized the court for this distinction, but it must be acknowledged that all courts agree that there is a balance to be struc k between the infringement on speech resulting from the landowner's conduct and the landowner's interest that it be free of unwanted speech activities. The nature of the speech may figure in that balance.

The court in the instant case dealt with a classic "big box" discount grocer, that operated an 80,000 square foot premises with parking for 500 cars and 27,5000 transactions per week. This, of course, is hardly a "modest retail establishment." Further, the vast curtilage of the parking lot effectively insulated shoppers at the premises from any contact with speech activities when they came to shop. The court, however, concluded that the primary weight of the Pruneyard doctrine properly falls upon landowners who choose to invite the public to their premises for reasons that are not purely retail oriented providing public gathering space and performances and meeting opportunities. It pointed out that the Chico Mall, right across the street from the defendant's store, provided all these things and, implicitly at least, concluded that that mall was within the ambit of Pruneyard.

But the court went on to conclude that the very presence of the Chico Mall reduced the significance of the plaintiff's free speech interest in this case. (It assumed, apparently, that the patrons of Waremart also could be reached through activities at the mall.) The court chose to disregard evidence provided by plaintiffs that "big box" retailers are replacing retail malls as the shopping venue of the future. It observed that such evidence was irrelevant to the free speech issue because in any event the nature of the retail activities at a "big box" is not the same "town square" activity that occurs in a mall, and therefore the justification for protection of the landowner's expectation of privacy is greater..

The court, in fact, commenced with the pronouncement that it was publishing its decision "primarily to deal with some pesky dictum in one of our prior opinions." The problematic case is the Bank of Stockton decision and the language, discussed above, that indicates that large single purpose retailers are not "modest retail establishments" within the meaning of Pruneyard and thus are subject to the duty to accommodate free speech on the authority of Lane. The court disavows this language and basically slams the door of the big box on free speech.

Comment: This issue really should be resolved by the California Supreme Court, since it was the court that originally decided Pruneyard and approved Lane. The editor suspects that the court likely is more conservative than the 1979 court, and perhaps the plaintiffs are concerned that an appeal to that court will do away with Pruneyard altogether. But the lead plaintiff clearly has resources it is in the business of collecting referenda petition signatures, and financed a virtually identical case against the same defendant in Washington state, losing there as well. Waremart, Inc. v. Progressive Campaigns, 989 P.2d 524 (Wash. 1999). This may be a case to watch.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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