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Green Party of New Jersey v. Hartz Mountain Industries, Inc.

324 N.J. Super. 192, 735 A.2d 9 (App. Div. 1999)

SHOPPING CENTERS; LEAFLETING—A mall may impose reasonable requirements on political and social leafletters, including requiring reasonable insurance coverage, and limiting the frequency of such activity by any one person or group.

An individual political activist and a newly formed political group challenged the constitutionality of a shopping center’s regulations regarding persons or groups who wished to distribute leaflets at the shopping center. The regulations limited the frequency of any one person’s permission to distribute leaflets at the shopping center, and required each such person both to provide evidence of $1,000,000 in insurance coverage and to sign a license agreement containing a “hold harmless” provision. The New Jersey Supreme Court had held that certain regional and community shopping centers (including this particular shopping center) must permit political and social leafleting on their premises, subject to reasonable conditions. The political party characterized itself as small and poorly financed. Its mission was to distribute informational materials in public places, including shopping malls, when an issue of concern to the organization developed. It anticipated seeking access to this particular shopping center to distribute political literature with some regularity and claimed that it would be unable to afford the insurance premiums for $1,000,000 in insurance coverage. The organization requested space to set up an information table at the shopping center and signed the shopping center’s license agreement and regulations. The shopping center reserved a particular date, pending receipt of a required insurance certificate, a cleanup deposit, and the original license agreement. The organization obtained a quotation for insurance coverage for the day’s activities at the shopping center. The quotation covered leafleting and petitioning only and stated that there would be an additional charge for coverage for similar activities at other malls. The political group lacked the funds to purchase the insurance, and because its rules did not permit contributions over $250, personal payment of the insurance premium by a member would have been prohibited. Further, it did not believe that it should spend money on insurance for leafleting for one day in the shopping center because “we have a lot of activities we could do that would further our cause greater than access one day at a mall.” Testimony by the shopping center’s expert in insurance underwriting was to the effect that shopping centers invariably require insurance from their tenants and vendors because operating shopping centers is a high risk business and there is broad exposure to claims for slips and falls. In fact, most of the shopping center’s tenants were required to have insurance coverage of at least $5,000,000 per occurrence and most leases contained a hold harmless provision. Further, the shopping center testified that it had entered into license agreements with various organizations, all of which had always provided the required insurance. Its testimony also revealed that, from time to time, it permitted organizations to use the space for additional days or for a period of up to seven days, based on the shopping center’s experience with that organization. Nonetheless, neither the insurance requirement nor a cleanup deposit requirement had ever been waived. One of its other regulations prohibited organizations from using the shopping center during the pre-holiday season. The shopping center testified that during three recent pre-holiday seasons, because all of the floor space for kiosks and carts was occupied, the shopping center had been forced to turn away paying tenants and therefore, it was unreasonable to allow non-paying, non-profit groups to use space during that period. In the earlier Supreme Court opinion, it was held that a shopping center’s power to impose regulations concerning the time, place, and manner of exercising the right of free speech is extremely broad. It was assumed in that case that shopping centers could limit the time of leafleting to specific days and to a specific number of days. The Court believed that such regulations survived scrutiny as a reasonable business means for assuring that the free speech activity did not interfere with the shopping center’s business. Restricting the presence of leafleting organizations in the shopping center for “one day or a few consecutive days per year,” is squarely within the law in New Jersey and “in most cases malls can limit the time of leafleting to specific days, and a specific number of days.” Moreover, the shopping center’s regulations constituted the sound exercise of business judgment in that they permitted the shopping center, a commercial enterprise, to lease space to paying vendors. In addition, in practice, the frequency limitation did not appear to undermine the effectiveness of the freedom of speech rights granted to the leafletters. Testimony was given to the effect that the shopping center allowed groups to use the shopping center more frequently, especially if the group did not achieve its goals because of insufficient shopping center attendance on its scheduled date. Under the circumstances, the Court held that the frequency requirement was reasonable.

The Court was more troubled by the issue of required insurance. The lower court held that “[t]he onerous cost of such insurance prevents most politically and socially active groups from exercising free speech rights.” The Appellate Division, however, held that there was no factual basis or qualified evidence in the record below for what was “really a net opinion.” It was not important that, based on its then relatively limited experience with leafleting activities, the shopping center owner was unaware of any claims for damages, any personal injury or property damage, or direct shopping center security or law enforcement involvement. To the Court, it was clear that the shopping center owner held a good faith reasonable belief for imposing the insurance requirement. It found no reason why a private owner of a regional shopping center could not impose reasonable insurance or hold harmless requirements in most, if not all, applications to use the shopping center for leafleting purposes. “The mere fact that incidents have not occurred, does not guarantee that some incident will not occur, and it is not reasonable that an owner of private property cannot seek to protect against possible claims, whether real or frivolous. Moreover, a property owner does not have to await a tragic event, whether or not catastrophic before taking protective action. Indeed, a principal purpose of insurance is to protect against risk of loss.” While the Court did not say that shopping centers could or could not require insurance in the amount of $1,000,000, it was prepared to validate a shopping center’s good faith reasonable business judgment provided that such judgment took into account criteria for waivers where there are eligible groups that truly would not be able to afford the cost of insurance. For this and similar reasons, the Court concluded that the hold harmless requirement withstood scrutiny as an objectively reasonable means of deferring risk of loss. Lastly, the Court held that barring activities during certain high traffic periods, such as pre-holiday shopping periods, was a reasonable means to enable a shopping center to keep common areas open at such time.


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