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Green Party of New Jersey v. Hartz Mountain Industries

June 13, 2000

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.



The opinion of the court was delivered by: O'hern, J.

Argued March 28, 2000

On certification to the Superior Court, Appellate Division, whose opinion is reported at 324 N.J. Super. 192 (1999).

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 center *fn1 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. *fn2 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. *fn3

9. Permittee must provide a valid Certificate of Insurance, including general liability insurance in the combined single limit of $1,000,000. The certificate must contain an endorsement in the form contained in the License Agreement.

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.

In addition, the license agreement required an insurance endorsement naming "Hartz Mountain Industries, Inc. and its respective subsidiaries, affiliates, associates, joint ventures and partnerships as additional insured."

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. *fn4 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. *fn5

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. *fn6 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." *fn7

D.

On appeal, the Appellate Division reversed the Chancery Division's grant of summary judgment to plaintiffs. It held that the frequency regulation limiting distribution of leaflets for only "one day or a few consecutive days" per year was reasonable. In addition, the court held that the regulations requiring insurance and the signing of a "hold harmless" clause were not unreasonable as a matter of law. Its decision is reported at 324 N.J. Super. 192 (1999).

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 ...


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