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Private Communities Can Regulate Residents' Speech, N.J. High Court Rules
New Jersey Law Journal
July 30, 2007
New Jersey's Supreme Court, easing up on its propensity for imposing constitutional obligations on property owners, has ruled that private residential communities may regulate expressive activity within their borders.
The justices held Thursday that a homeowners' association's rules regulating placement of political signs, charging rent for use of a community room and setting an editorial policy for its community newspaper were reasonable restrictions on time, place and manner of speech.
"[We] conclude that in balancing plaintiffs' expressional rights against the Association's private property interest, the Association's policies do not violate the free speech and right of assembly clauses of the New Jersey Constitution," the justices held unanimously in Committee for a Better Twin Rivers v. Twin Rivers Homeowners Association, A-118-122-05.
The ruling puts a kink in a line of New Jersey court cases that have required universities, shopping malls and other property owners to allow free speech when they invite public access. Those cases -- notably State v. Schmid, 84 N.J. 535 (1982), overturning Princeton University's ban on leafleting on campus, and New Jersey Coalition Against the War in the Middle East v. J.M.B. Realty Corp., 138 N.J. 326 (1994), voiding a shopping mall's leafleting ban -- rested on the sociological premise that such properties are "functional equivalents" of town squares and other public forums.
The state's appellate division applied that line of cases in ruling last year that the Twin Rivers Homeowners Association, which governs a 2,700-home complex in East Windsor, N.J., with 10,000 residents, is a "constitutional actor required to respect fundamental rights protected by the New Jersey Constitution when exercising dominion over persons residing within its borders."
While not disagreeing in principle, the court said the Schmid/Coalition principles apply differently to a private residential community, where invitation of the public is minimal and where homeowners knowingly waive or curtail constitutional rights as a matter of contract to achieve a certain type of residential environment.
"Twin Rivers is a private, residential community whose residents have contractually agreed to abide by the common rules and regulations of the Association," wrote Justice John Wallace Jr. "We find that the minor restrictions on plaintiffs' expressional activities are not unreasonable or oppressive, and the Association is not acting as a municipality."
The justices did leave open the possibility that more onerous regulations might be actionable. "Our holding does not suggest ... that residents of a homeowners' association may never successfully seek constitutional redress against a governing association that unreasonably infringes their free-speech rights," Wallace wrote.
He noted that residents have other protections against infringement of their free speech rights. They include the business-judgment rule, which allows invalidation of arbitrary decision making by a governing association.
In addition, Wallace said, restrictive covenants that unreasonably limit speech and association rights could be challenged under a section of the Planned Real Estate Development Full Disclosure Act, N.J.S.A. 45:22A-44(b), that requires a homeowners' association to "exercise its powers and discharge its functions in a manner that protects and furthers the health, safety and general welfare of the residents of the community."
Finally, traditional principles of property law apply. "Our courts have recognized that restrictive covenants on real property that violate public policy are void as unenforceable," Wallace said. And since "highest source of public policy" is the state constitution, "restrictive covenants that unreasonably restrict speech -- a right most substantial in our constitutional scheme -- may be declared unenforceable," he concluded.
Homeowners' associations and free-speech advocates have been waiting for the ruling since about 1 million people in New Jersey, or about 40 percent of all households, live in some type of planned community with varying restrictions.
The lawyer representing the Twin Rivers association, Barry Goodman, of Woodbridge, N.J.'s Greenbaum Rowe Smith & Davis, says the court "agreed that homeowners' associations are not governed by the constitution, and that the rules Twin Rivers had at issue were absolutely reasonable."
The plaintiffs lawyer, Frank Askin, says the ruling is "oblique" in that it upholds the particular restrictions at Twin Rivers but says homeowners' associations may not totally clamp down on residents' speech. "I think they're just saying that these three rules are not unreasonable," says Askin, director of the Constitutional Law Center at Rutgers Law School-Newark. "I would call it a mixed result."
But Askin concedes the court is "pulling back" from the standards it set in Schmid and Coalition. "That opens the door for more litigation," he says.
