Daily
Development for Friday, August 6, 1999
By:
Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu
CONSTITUTIONAL LAW; FREE SPEECH; SHOPPING
CENTERS; TIME, PLACE & MANNER REGULATION: New Jersey court rejects
California "narrowly tailored standards" test, permits restrictions
on leafleting that include insurance and hold harmless requirements, but
requires justification for such requirements based upon the nature of the
applicant and its proposed activities.
The
Green Party of New Jersey v. Hartz Mountain Industries, Inc., 1999 WL 562149
(N.J.Super.A.D. 8/3/99) There are very few appellate cases involving time place
and manner restrictions, especially outside of California, and this decision,
assuming it is not appealed and reversed, will be a potent weapon for shopping
center owners in dealing with speech activities on their premises.
It
begins with the notion, already establishing in New Jersey, that regional
shopping centers are public fora and that their owners are required to make
reasonable accommodation for those desiring to conduct speech activities on
their premises. This was decided in New Jersey Coalition Against War in the
Middle East v. J.M.B. Realty Corp., 138 N.J. 326, (1994), cert den. 516 U.S.
812 (1995), a case in which the instant mall owners were named defendants.
Similar to the famous Pruneyard decision, the Coalition case was based upon the
free speech provisions of the New Jersey Constitution, and not the U.S.
Constitution.
Plaintiffs in this case were seeking to
circulate petitions to obtain recognition of their political party in the
state. This activity was of the type recognized as worthy of protection under
the Coalition decision, which had stated that malls had a duty to accommodate
"leafleting and associated speech in support of, or in opposition to,
causes, candidates, and parties political and societal." Coalition had
stated that there was not duty to permit "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 leafleting."
Specifically excluded was the sale or literature or the solicitation of funds
(except as contained in leaflets themselves). But Coalition had permitted mall
owners to establish "time place and manner" rules:
"The centers' power to impose
regulations concerning the time, place, and manner of exercising the right of
free speech is extremely broad. We assume that in most cases malls can limit
the time of leafleting to specific days, and a specific number of days.
Certainly no individual or group will be entitled to be present any more often
than is necessary to convey the message. [the court went on to acknowledge that
regulation could not be such as to prevent communication of the message where a
particular day or time was critical such as the day before and election]."
The mall
owners in the instant case imposed two regulations that the Green Party found
difficult to live with: First, the mall restricted speech activities to one day
per group per year. (The mall had in the past granted special exemptions where
the applicant demonstrated special requirements for more time.) Second, the
mall required that each applicant hold harmless the mall for any liability
arising from activities relating to the applicant's activities and in addition
provide evidence of liability insurance in the amount of $1 million.
Although
the record is uncertain on the issue, the Green Party claimed that such
insurance would have cost it $665 for the one day it sought access to the mall.
It claimed it could not afford to pay this amount, in part because it
restricted donations from any one individual to $250, so no one person could
provide the insurance, and it was expending its donations on other matters and
had small amounts in its accounts.
The
Green Party, which apparently consisted originally mainly of activists related
to Ralph Nader organization, promptly brought suit challenging the mall's
requirements. It obtained a preliminary order requiring the mall to permit it
to conduct its leafleting.
Later,
the trial court took additional evidence and made a permanent determination as
to the validity of the mall policies, even though by that time the Green Party
had completed its efforts to get recognition, and the immediate need for
leafleting for that purpose was over. The court agreed to decide the case as it
involved matters of "substantial public importance." The trial court
judge found that both the "one day a year" restriction and the
insurance and hold harmless requirement were per se bars to effective free
speech, applying the standard used in California that the mall owners had a
duty to "narrowly tailor" any restrictions to promote the mall's
substantial interests.
On
appeal: Held: Reversed. The appeals court rejected the notion that the
"narrowly tailored" standard applied in New Jersey, and confirmed
that both frequency and liability regulations could be valid and reasonable
business judgments by the mall, when designed to protect its business interests
and not directed at any particular group or form of speech.
The
appeals court synthesized a two pronged approach to the evaluation of a mall's
regulations on speech activities: "(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 centers 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?"
The
court specifically rejected the application of what it called the
"California standard" established in HCHH Assocs. v. Citizens for
Representative Gov't, 238 Cal. Rptr. 841 (Cal. App. 1988), requiring that
speech regulations be "narrowly focussed in the traditional manner,"
although it cited other California authority providing a broader standard when,
as here, there are fewer relationships between the private mall and
governmental activity than there were in HCHH, where the mall was part of a
downtown redevelopment project.
Applying
the broad standard it thus synthesized, the court had little trouble validating
the mall regulations in principle here. The "one day a year" rule
clearly was consistent with protection of the mall's interests, as the space
occupied by the leafletters was space that the mall occasionally leased to
kiosk and pushcart operators. The policy did not inhibit The Green Party's
speech activities especially because the mall permitted exceptions where mall
attendance on the given day was insufficient to accomplish the applicant's
goals.
The
court acknowledged that the insurance requirement was "more
troublesome." The special concern, of course, was that the cost of
insurance was relatively high, inhibiting free speech on the basis of wealth,
and thus restricting the rights of small groups and individuals. The court
reviewed a number of California cases that had required that the mall justify
an insurance requirement by an analysis of the danger presented by the group in
question, based upon prior experience with this or similar groups. It reviewed
a number of cases from other jurisdictions striking down insurance requirements
imposed by public agencies as a prerequisite to exercise of free speech. It
ultimately rejected some of the California cases because, as indicated, it
viewed those cases as imposing a more stringent standard than existed in New
Jersey. It rejected the public agency cases because the danger of liability to
a private owner, not shielded by sovereign immunity and lacking law enforcement
powers, is significantly greater.
Ultimately,
the court concluded that malls could impose insurance requirements for exercise
of speech activities. It set certain standards applicable to such requirements:
"In analyzing whether insurance should
be required, and the precise amount, affected malls may take into account
various factors such as (1) the identity of the applicant and the individuals
who will participate in the activity at the mall; (2) other locations where the
participants engage in similar activity in the current and previous years and
any injuries to person or property that occurred; (3) the size of the group and
its assets; (4) the number of people who will be leafleting on behalf of the
group at a mal at the same time or at any one time; and (5) the insurance
requirements imposed on other short time occupiers of space at the mall."
The
court stated that the list of factors above is not exhaustive, and that the
amount of insurance must be a good faith business judgment. The mall owner
"should take into account criteria for waivers where there are eligible
groups that truly would not be able to afford the cost of insurance." The
court elsewhere noted that the fact that The Green Party had small amounts in
its bank account may have reflected its spending priorities, rather than its
true wealth.
Similarly,
the court concluded that the hold harmless requirement was an "objectively
reasonable means of deferring risk of loss," and apparently indicated a
willingness to permit such a requirement subject to the standards set forth
above.
The
court finally noted that a lengthy "black out period" in which no
leafleting is permitted during periods of heavy mall traffic may be
permissible, but should take into account special speech needs, such as the
weekend before a general election.
In sum,
because the trial court had held that the insurance and hold harmless
requirements were per se impediments to free speech rights, the court reversed.
But it clearly indicated that the mall operators have a burden to justify their
requirements and may have a greater duty to tailor those requirements to
particular applications, within the broad standard of "business
judgment."
Comment
1: Although Hartz Mountain was vindicated in its "one day a year"
policy, it and other mall operators can't be happy about the insurance and hold
harmless discussion in the court's decision. It appears that the court is going
to require a case by case determination, subject every time to judicial review,
of the validity of its insurance requirements. The court further suggested that
in some cases the mall operator should require pricing a rider to its own
insurance coverage and passing that cost along, rather than requiring outside
insurance. Sooner or later the time and cost of all these activities will be
swallowed by the mall operators. It can't all be passed through. Further, the
risk of a major lawsuit from a contentious speech advocate because of a
mistaken judgment by a relatively low level employee may cause malls to drop
the insurance and hold harmless requirements altogether, and simply grumble
about it.
Comment
2: Granted, once we conclude that the mall operators are "public" for
purposes of honoring free speech claims, we have to recognize that we've got a
specially protected fundamental right that requires careful treatment. But the
solutions proposed by the court here seem neither practical from an economic
standpoint (as pointed out above) nor from a speech standpoint. Although the
court says that the decisions made must be objective and neutral, the factors
that it requires the mall operators to take into account necessarily will lead
them to make decisions involving the nature of the groups and the content of
their speech.
If a
mall executive agrees with the message the group intends to deliver, he is far
less likely to perceive that the group will present a danger of disruption and
liability he would if the group is strange or even hostile to his
sensibilities. Right to life groups, for instance, although they have a long
history of violent confrontation in many areas, may be passed through, while
gay rights advocates may not. Or, for that matter, vice versa. Perhaps a better
answer is an attempt by some group such as the ICSC to establish some kind of
general standards for insurance risks based upon neutral factors, such as the
size of groups and the kind of activity proposed, and work with the industry to
get reasonable insurance quotes for this kind of activity so that the costs are
not really exclusionary. There may be cases where the content is so scary that
the mall still will have to make an individual judgment, but it would seem
better to limit these cases to the rare exception, and treat the rest through a
standardized national practice.
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