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State v. Schad

July 28, 1999


On certification to the Superior Court, Appellate Division, whose opinion is reported at 307 N.J. Super. 493 (1998).

The opinion of the court was delivered by: Handler, J.

In this case, a municipality applied the restrictive provisions of its sign ordinance against interior store displays that were visible from the exterior of the premises. The owner of the building premises contended that the ordinance did not apply to interior displays and that the enforcement of the ordinance was unconstitutional primarily because it violated rights of free speech protected by the First Amendment. The appeal thus raises the initial issue of the interpretation of the municipal ordinance and whether its provisions apply to signs that are not physically located outside or affixed to the exterior of a commercial property. If the ordinance embraces such displays, that issue in turn gives rise to constitutional defenses involving essentially the reasonableness of restrictions on commercial speech.


Defendant, James Schad, operates two adult entertainment establishments in the Township of Pennsauken, one on Admiral Wilson Boulevard and the other on Route 73. Both locations have illuminated, free-standing signs and at least one building-mounted sign, all of which either conform to the requirements of the Township's sign ordinance, Pennsauken Code § 126-711 (Code), or were permitted as non-conforming uses under the ordinance. Code § 126-711(C)(7).

In September 1995, without securing a requisite permit, defendant erected eight displays at the Route 73 store and twelve displays at the Admiral Wilson Boulevard store. Each display consisted of a color transparency measuring 42.75 square feet, depicting a woman dressed in swimwear, and was set in an individual wooden encasement with a backlit panel and a glass front. The displays were placed twelve to twenty-four inches behind the stores' front windows, but were not attached directly to the windows. The transparencies were visible only from outside the buildings and were illuminated at night.

Defendant was issued summonses in connection with the transparency displays for various violations of the Township's sign ordinance. Those violations included the failure to remove signs exceeding the maximum number permitted and the maximum gross square footage allowed at a given location, Code § 126-711(C)(2), and failure to obtain permits for the transparency displays, id. at § 126-711(G)(1) and (2).

On March 21, 1996, defendant was found guilty by the Pennsauken Municipal Court and was fined $30,000, together with costs of $120. The court held that the ordinance applied to defendant's transparencies even though they were located within his stores, and rejected defendant's constitutional defenses. On September 3, 1996, following a trial de novo in the Law Division, defendant's convictions were affirmed.

On June 28, 1996, summonses were once again issued to defendant, charging continuing violations of the same sign ordinance provisions. On September 25, 1996, defendant was again found guilty by the municipal court and fined $102,000. On appeal to the Law Division, and following a trial de novo, defendant's convictions were affirmed, but the fine was reduced to $65,920.

On February 5, 1997, defendant appealed to the Appellate Division for a review of the lower court proceedings. The Appellate Division, addressing both appeals in one opinion, reversed all of defendant's convictions. 307 N.J. Super. 493 (1998). The court determined that the transparency displays placed inside the windows of each adult entertainment premises were not "signs" within the meaning of the Township's sign ordinance. Id. at 500. The Appellate Division vacated the fines. Ibid.

The Township petitioned for certification to review the Appellate Division's interpretation of the ordinance. Defendant filed a Notice of Cross-Petition for Certification to review the constitutional issues not addressed by the Appellate Division. This Court granted both petitions. 156 N.J. 382 (1998).


The sign ordinance is part of Chapter 126 of the Township of Pennsauken Code, entitled "Development Regulations." The purposes of the regulations are set out in the ordinance, and include the promotion of "public health, safety, convenience, morals and general welfare[,]" Code at § 126-101(A); the "preservation of the most healthful and otherwise beneficial environment[,]" id. at § 126-101(E); the encouragement of "compatibility in the visual environment[,]" id. at § 126-101(I); and the promotion of "free flow of traffic" and reduction of traffic "congestion and blight[,]" id. at § 126-101(H). The ordinance expressly provides that the development regulations should be interpreted to hold provisions to "the minimum requirements for achieving the goals and purposes" of Chapter 126. Id. at § 126-100(B).

Section 126-700.1 of the ordinance defines a sign as:

"A structure and a land use, a building wall or other outdoor surface or any device used for visual communication, display, identification or publicity and more fully described under § 126-711 of this chapter."

Section 126-711(A) elaborates on that definition:

"A sign shall include banners, streamers, whirling or lighting devices or any other type of attention-attracting device and may be a single-faced, double-faced or a V-type structure."

Section 126-711(A) of the ordinance also describes several types of signs in respect of applicable regulations. For example:

"(1) Business sign. A sign which directs attention to a business or commodity for sale, or a profession, service or entertainment rendered or offered upon the premises where such sign is located."

"(7) Illuminated Sign. Any sign which is designed to be seen at night by virtue of artificial light from within, behind or upon such sign, but not including reflector-type signs unless the source of light is made a part of, or is related to, such sign."

"(9) Wall sign. A sign attached to or painted on a wall and subject to all sign regulations herein."

The ordinance requires a permit for certain types of signs, including non-residential signs exceeding twelve square feet and any illuminated sign, regardless of size. Id. at § 126-711(G)(1). Applicants must submit, as part of the permit application, "a sketch showing the size, location, text and owner [of the sign] . . . indicated in writing, together with a fee." Id. at § 126-711(G)(2). The required fee differs based on the square footage of the sign for which a permit is sought. Ibid. A sign measuring 8 to 25 square feet requires a $40 fee; a sign containing 25 to 100 square feet requires a $100 fee; and a sign covering more than 100 square feet requires a $150 fee. Code § 120-12(G) (amending § 126-711(G)(2)).

In order to receive a permit, an applicant must conform to the ordinance's various restrictions on the sign size, number, location and type. The relevant regulations in this case govern business signs in commercial districts:

"C. Signs in commercial districts. The following signs may be erected and maintained in commercial districts, subject to the conditions specified:"

"(2) Business signs or signs for any permitted commercial activity. A sign may be erected and maintained on the same building or premises as the use to which it refers, provided that:

(a) The number of such signs shall not exceed two (2) in C-1 Commercial Districts and four (4) in C-2 Commercial Districts.

(b) The maximum total area of all permitted signs shall not exceed an area equal to two (2) square feet for every one (1) lineal foot of building frontage; and signs shall be permitted on a building wall or roof; provided, however, that no sign shall extend ...

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