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Dublirer v. 2000 Linwood Avenue Owners, Inc.

A-4800-08T3 (N.J. Super App. Div. 2011) (Unpublished)

COMMON INTEREST OWNERSHIP; COOPERATIVES — Where a housing cooperative’s board seeks to restrict political-like speech, a court must examine the fairness of the restrictions imposed by the board, including looking at the board’s own activities and the exceptions it may have previously given with respect to those restrictions.

A cooperative housing corporation had house rules that were referenced in, and appended to, each shareholder-tenant’s propriety lease. The rules did not allow solicitation or the distribution of any written material anywhere on the property without permission from the board of directors. From time to time, the board granted itself exceptions to this rule and distributed literature to shareholder-tenants under the apartment doors. The board also granted other exceptions, including allowing local police and firefighters associations to solicit donations during their fundraising drives.

A shareholder-tenant inquired as to whether the rule would apply to his distribution of materials to further his plan to run for a position on the board. The board, through its attorney, told the shareholder that the rule did apply; nevertheless, the shareholder made a formal request for authorization. His request was denied by the board’s attorney. The shareholder-tenant sued to challenge the rule and for the right to distribute his literature. He also sought an order to enjoin the board of directors’ practice of collecting proxy votes by an employee rather than by the board secretary. The corporation filed a counterclaim seeking attorneys’ fees. The lower court rejected the shareholder’s federal and constitutional claims. However, it found that the board’s practices for collection of proxy vote was not consistent with the by-laws and directed the board to change its practice. The lower court also denied the corporation’s request for counsel fees, holding that the lease provision was ambiguous.

The shareholder-tenant appealed. First, the Appellate Division reaffirmed the holding in Committee for a Better Twin Rivers v. Twin Rivers Homeowner’s Ass’n to the extent that no state action is required for a cause of action under the New Jersey State Constitution. The Court then investigated the three State v. Schmid factors: “(1) the nature, purposes, and primary use of such private property, generally its ‘normal’ use, (2) the extent and nature of the public’s invitation to use that property, and (3) the purpose of the expressional activity undertaken upon such property in relation to both the private and public use of the property.” Under the first factor, just as in Twin Rivers, the Court concluded that the co-operative corporation’s project was primarily residential and private. Similarly, under the second factor, the Court also found the public was not generally invited to use the property.

Because the effect of the solicitation restriction was to inhibit political speech, and specifically to thwart speech critical of the board and to thwart speech designed to permit the plaintiff to run against an incumbent board member, the court considered it “political-like speech.” Thus, it concluded that it needed to examine “the fairness of the restrictions imposed by the Association.” Then, the Court noted that the Association had violated its own restrictions several times each year insofar as the Association distributed written materials under shareholders’ doors to save postage. The Court also noted that the Association permitted certain charitable organizations to also violate the solicitation restrictions.

At this point, the Court considered the time, place, and manner attributes of the restrictions. It examined available alternative means of communication and found them lacking; the coop-corporation’s rules prohibited written materials on one’s own door or window, distribution of written material anywhere on the premises, contributions to the board’s newsletters, and delivery of political-like speech related to board elections by going door-to-door. The effect of such restrictions was that a shareholder was left with only the ability to circulate writings at a semi-annual meeting, posting them on a bulletin board, or using the mail. With respect to speaking, the only apparent permissible outlets were inside an apartment after an unsolicited invitation, in a common area during an unsolicited conversation, or at the annual meeting. Viewing these restrictions in light of the board’s “exceptions” noted above, the Court concluded they were too restrictive. Thus, it reversed the lower court’s summary judgment and entered judgment in favor of the plaintiff.

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