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Linmark Associates Inc. v. Township of Willingboro

decided: April 28, 1976.


Appeal from the United States District Court for the District of New Jersey.

Gibbons, Circuit Judge, Markey,*fn* Chief Judge of Court of Customs and Patent Appeals and Weis, Circuit Judge.

Author: Markey


Markey, Chief Judge, Court of Customs and Patent Appeals.

Linmark Associates, Inc. (Linmark), a New Jersey corporation of Camden, New Jersey and owner of residential premises at 25 Sherwood Drive, in the Township of Willingboro, New Jersey (Willingboro) and William Mellman (Mellman) of Mellman Realtors of Cinnaminson, New Jersey, Linmark's real estate broker, challenged the constitutionality of a Willingboro ordinance which barred the erection of "For Sale" and "Sold" signs on residential properties. The complaint charged the ordinance as unconstitutional because it deprives plaintiffs of their right of free speech under the First and Fourteenth Amendments, deprives plaintiffs of their property without due process of law in violation of the Fifth and Fourteenth Amendments, discriminates against plaintiffs and denies them due process and equal protection under the Fourteenth Amendment, denies plaintiffs their right to freely acquire and alienate property under the Ninth and Fourteenth Amendments, bears no relationship to public health, safety and welfare, is in derogation of the police power, is an abuse of its enabling legislation, denies Mellman his right to do lawful business in violation of the Ninth and Fourteenth Amendment and is overbroad. After a nonjury trial, the district court held the ordinance to be an abridgement of the First Amendment's free speech guarantee and an infringement on "the fundamental right to travel." Because we cannot find support in the record for the district court's legal conclusions, we reverse.

Historical Background

Residential development of Willingboro from the late 1950's is attributed chiefly to Levitt and Sons, Inc., which built moderately priced homes for middle income families. Development, now virtually complete, proceeded through the "part system" whereby ten distinct areas (parts) were sequentially developed. In the early stages, Levitt refused to sell its houses to minority group members. The New Jersey Supreme Court enjoined that racially based housing discrimination. Levitt and Sons, Inc. v. Division Against Discrimination in State Department of Education, 31 N.J. 514, 158 A.2d 177, appeal dism., 363 U.S. 418, 80 S. Ct. 1257, 4 L. Ed. 2d 1515 (1960).

Thereafter, a Human Relations Commission was formed and development of the community with full racial integration was actively encouraged. The Township joined National Neighbors, a nationwide organization promoting integrated housing and advising on what can be done to overcome discriminatory housing practices. As a result, a close approach was achieved to that housing ideal sought by fair-minded citizens, mandated by the federal Fair Housing Act, 42 USC ยง 3604, and impelled by our Constitution. Willingboro became a racially open community, with each of its ten "parts" having all racial and ethnic groups living together, with no section which could be denominated a white section, a black section, or a Spanish-speaking section. Between 1970 and 1973, the non-white population increased by 60% and had risen, without the formation of a racially segregated area or "ghetto," from about 12% to about 18% of the total population.*fn1 During those same years, within the total population of 45,000, there had been a decrease of about 2,000 in the white population and an increase of 3,000 in the non-white population.

Historically, the Willingboro population has been transient due to the nearness of military installations and the nature of the people's employment. Eighty-two realtors, members of the Multiple Listing Service of Burlington County (MLS), were competing in the sale of houses in Willingboro. These conditions, and the uniformity in home construction,*fn2 made it possible for a number of "For Sale" and "Sold" signs in a limited area to create the impression that many people were leaving the community. A fear psychology developed among home owners, which Council member and former Mayor W. J. Kearns, Jr. characterized in his trial testimony as follows:

I think most of us in the official level, and most of the citizens who were concerned about it that I talked to, felt that this was an irrational reaction on the part of many people, and that we were dealing with a psychological problem that we had to find some way to give people the feeling of stability so they would not overreact to a particular situation.

I don't think anyone was concerned with people of minority groups moving into the community or reaching a 20 percent, or even somewhere in the range of 20 to 25 percent minority grouping. They felt this was properly a generally [sic] average throughout the Delaware Valley area.

But they did feel that if we had a situation where white home owners in the community were moving, not because they were transferred or not to move to a larger home or a smaller home, for other economic reasons, but were moving because what they sensed was the reaction of the community, but that we would wind up with Willingboro hitting beyond the point of minority group population that would turn it into an isolated pocket of minority groups in Burlington County. It would no longer reflect an integrated community, but would become a ghetto.

Concern for the preservation of the well-integrated character of the community and the desire to counteract the growing fear psychology produced a public sentiment against "For Sale" and "Sold" signs on residential property. Responding to that sentiment, the township council investigated the approach of other cities. At the trial, Mayor Kearn stated the results of the investigation into Shaker Heights, Ohio's experience to have been:

They indicated that at the outset there was a strong hostility to their ordinance on the part of the realtors. But that after having worked with it for a year, to a year and a half, that they found they have good compliance, and that it was working very successfully.

The Township council consulted the Willingboro Human Relations Commission for its views and recommendations. The response was described at the trial by Mrs. Gladfelter, a founder-member of the Commission and its chairperson in 1973-74:

Yes, I think we specifically were recommending at this time that council move to consider an ordinance or any other possible way to prohibit sale and sold signs throughout the township.

The concern of the Commission was described at the trial by Commission member Alexander W. Porter as follows:

I think the Commission would like to see a community which is as harmonious as it would choose to be without the kind of pressures, if I may use that term, which would induce people to sell when in fact they don't want to sell; and I think that's the thing that the ordinance was directed at.

Individuals were responding and reacting to a rash of signs, or, one sign which would lead to another, and another and another.

I think that's the concern the Commission was trying to address.

Public concern with the effect of "For Sale" and "Sold" signs had become widespread in 1972 and became an issue in the 1973 elections to membership on the Township Council. The Council's normal policy was to hold one public meeting after an ordinance had been drafted and before its adoption. With respect to the signs, however, after two years of public ferment, the Council conducted two public hearings, one before (February 4, 1974) and one after (March 18, 1974) the drafting of the ordinance herein. More than 50 citizens presented their views during the more than four hours devoted exclusively to the question of the signs on residential property. Complaints were stated regarding phone calls, letters and house-to-house solicitations by realtors inquiring whether the homeowner wished to sell;*fn3 about panic selling; about "Sold" signs remaining up for six weeks in violation of an ordinance requiring their removal in five days (in response to which Council members cited the great difficulty of enforcement); about the "forest" of signs, which created the impression that "there was something wrong with the community," and consequent departure of persons who might otherwise have remained. Realtors and representatives of real estate brokers were the main spokesmen against the ordinance, describing the signs as "tools" needed in their business. Some realtors injected race questions in their arguments against the ordinance. One realtor questioned whether the council had funds to defend the ordinance in litigation.

At the end of the second public hearing, the ordinance, which took the form of an amendment to a prior ordinance and prohibited posting of "For Sale" and "Sold" signs on residential property other than model homes, was adopted unanimously by the Township Council, Mayor Kalik abstaining because she considered her status as a realtor raised a conflict of interest. The minutes of both public hearings, plus those of the Council meeting which adopted the ordinance and at which the Council members explained the reasons for their vote, were transcribed and made an exhibit (P-3) at the trial.*fn4

Proceedings Below

Suit was filed four months after the ordinance was adopted. One witness, Mellman, testified on plaintiff's side. His direct testimony consisted only in the statement that the nonavailability of a sign slowed the sale of the residential property of co-plaintiff Linmark Associates, Inc.; that he had had complaints from Linmark, as well as from other (unnamed) homeowners, regarding slowness in furnishing buyers and saying, "Why don't you put a sign up?"; and that an average of 30% of his inquires had resulted from signs over many years. Mellman did not state that the ordinance caused him any actual or specific loss of sales or commissions. After the cross-examination of Mellman, plaintiff rested. Defendant moved for dismissal for failure of plaintiffs to carry their burden. Decision was reserved, but the motion was never again mentioned, perhaps because defendant had indicated, prior to its motion, that plaintiffs' counsel intended to rely on "evidentiary proofs presented by defense."

Defendant presented seven witnesses, Councilmen Kearns and Heath, Human Relations Commission members Gladfelter and Porter, Human Relations Commission Chairman Rev. Ernest Shaw Lyght, and real estate agents Evans and Connolly.

Because of its laudable brevity and its relation to an understanding of our decision herein, the opinion of the district court is presented in the margin.*fn5


We are called upon to decide whether the district court erred in striking down the ordinance as (1) violative of the First Amendment guarantee of free speech, and (2) as an infringement of the right to travel.

Burden of Proof

Acts of legislative bodies, state and municipal, are presumed to be in harmony with the Constitution. See Erb v. Morasch, 177 U.S. 584, 20 S. Ct. 819, 44 L. Ed. 897 (1900). The present ordinance on its face constitutes some limitation on the right of free speech. In view of the "privileged position" of the First Amendment, therefore, we must review the nature of the message censored, the purpose and effect of the ordinance, and its relation to the public welfare as an exercise of the police power.

To defeat the ordinance on due process grounds under other constitutional provisions, however, Linmark and Mellman must establish, at least prima facie, that the ordinance is so unreasonable and arbitrary as to amount to an impermissible infringement on constitutional guarantees. Goldblatt v. Hempstead, 369 U.S. 590, 82 S. Ct. 987, 8 L. Ed. 2d 130 (1960); New Orleans Public Service, Inc. v. New Orleans, 281 U.S. 682, 50 S. Ct. 449, 74 L. Ed. 1115 (1930).

This action was brought by two business-oriented plaintiffs, whose interest in Willingboro lies in the profit to be derived from sales of real property in the community.*fn6 Linmark desired a faster sale of 25 Sherwood Drive. Mellman's sales commissions are earned only by turnovers in property ownership. Municipalities have a bona fide interest in regulation of commercial activities in residential areas. That community interest may, in a proper case, prevail over a claim of economic loss. Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S. Ct. 114, 71 L. Ed. 303 (1926). The plaintiff's case in chief involved a single witness, the realtor Mellman, whose limited testimony on direct is described above. Cross-examination of Willingboro's witnesses did not satisfy the burden of proof on the due process issue or even of economic loss.*fn7

Accordingly, the district court elected to rest its decision on free speech and right to travel considerations, concluding that the purpose of the ordinance was to maintain a racial imbalance and citing a suspicion that realtors might discriminate as support for its conclusions with respect to both free speech and the right to travel.

Review of the district court's conclusions does not require resolution of witness credibility or of conflicting factual testimony at the trial. We have, of course, considered the entire record in relation to the purpose of the council in adopting the ordinance, and in relation to the effect of the ordinance. Similarly, though the right to travel was never mentioned at trial or in the briefs below, and though plaintiffs had no standing to raise that third-party interest, Warth v. Seldin, 422 U.S. 490, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975); Construction Ind. Ass'n., Sonoma Co. v. City of Petaluma, supra, note 4, at 903, we have considered that question as well. As discussed more fully below, we cannot find wherein the record supports the district court's conclusions concerning the constitutionality of the ordinance.

Free Speech

Every anti-sign ordinance infringes to some extent upon some form of speech or type of message. If the ordinance herein had impeded "pure speech" its demise would have been certain. There is, however, a well recognized distinction between commercial advertisement and the advertisement of opinion, information and ideas. See United States v. Hunter, 459 F.2d 205 (4th Cir.), cert. denied, 409 U.S. 934, 34 L. Ed. 2d 189, 93 S. Ct. 235 (1972), reh. denied 413 U.S. 923, 93 S. Ct. 3046, 37 L. Ed. 2d 1045 (1973), and authorities collected therein. If, as seems clear, the present ordinance impeded speech primarily commercial, and the noncommercial portion of the message does not comprise comment on or protest of political or social policies or like elements of pure speech, the ordinance may be sustained by the public interest it serves.

Though signs in general convey a message or a thought, they do not always consist solely of "pure speech." A "For Sale" sign on a residence states the owner's and the realtor's commercial desire to sell that residence. A "Sold" sign states the commercial fact that the residence has been sold. The present signs thus incorporate a substantial "nonspeech" element. In United States v. O'Brien, 391 U.S. 367, 376, 88 S. Ct. 1673, 1678, 20 L. Ed. 2d 672 (1968), the Chief Justice stated:

This court has held that when "speech" and "nonspeech" elements are combined in the same course of conduct, a sufficiently important governmental interest in regulating the nonspeech element can justify incidental limitations on First Amendment freedoms.

The present ordinance does not attempt to dictate or regulate the content of permitted signs, it forbids particular signs altogether in a particular area, i.e., it limits the location of the involved signs, leaving other means available for conveyance of their content.*fn8 Our scrutiny, nonetheless, impels consideration of whatever message may reside in the signs. Though the message of the signs before us is primarily a commercial message, it is clear that a "For Sale" sign necessarily includes an additional message, i.e., "The owner is leaving this residence," and a "Sold" sign includes the message, "The owner has left this residence." We are unable to detect, and nothing in the record speaks of,*fn9 any other possible message in "For Sale" and "Sold" signs on residential property. As appears hereinbelow, we consider the limitation on the manner whereby and the place wherein both messages may be conveyed to have been based on a paramount governmental public interest, to wit the termination of a panic selling psychology and its impetus to housing segregation. Stated another way, we conclude that the manner and place limitation on commercial speech herein served a legitimate public welfare interest and the incidental manner and place limitation on noncommercial speech falls upon an unspoken or invisible "message" or communication of a nature insufficient to override that public interest on First Amendment grounds.

That a communication is commercial in nature does not ipso facto strip the communication of its First Amendment protections.*fn10 There is no "exception" which exempts a limitation on commercial communications, or "advertising, " from constitutional scrutiny. That a communication is commercial does, however, permit municipalities to weigh the impact on the general public of the manner in which the communication is made. And if that impact be found detrimental, and the limitation on any pure speech element be found minimal, the manner in which communication is made may be regulated. Valentine v. Chrestensen, 316 U.S. 52, 86 L. Ed. 1262, 62 S. Ct. 920 (1942).

Chrestensen was characterized in Bigelow v. Virginia, 421 U.S. 809, 95 S. Ct. 2222, 2231, 44 L. Ed. 2d 600, 610 (1975), as follows:

But the holding [in Chrestensen] is distinctly a limited one: the ordinance was upheld as a reasonable regulation of the manner in which commercial advertising could be distributed. The fact that it had the effect of banning a particular handbill does not mean that Chrestensen is authority for the proposition that all statutes regulating commercial advertising are immune from constitutional challenge. The case obviously does not support any sweeping proposition that advertising is unprotected per se. [Emphasis added and footnote omitted].

The advertisement banned by the state in Bigelow appeared in a Virginia newspaper and was for abortion services in New York. The court noted that Virginia could neither regulate the advertiser's legal services in New York nor prevent Virginians from traveling to New York to avail themselves of those services. Because the Virginia courts were found to have erred in their assumption that no First Amendment protection attaches to advertising, the Supreme Court found it unnecessary to decide the precise extent to which advertising may be regulated. The court then commented:

Advertising, like all public expression, may be subject to reasonable regulation that serves a legitimate public interest. See Pittsburgh Press Co. v. Pittsburgh Comm'n on Human Relations.

In Pittsburgh Press, 413 U.S. 376, 93 S. Ct. 2553, 37 L. Ed. 2d 669, reh. den. 414 U.S. 881, 94 S. Ct. 30, 38 L. Ed. 2d 128 (1973), a city ordinance forbidding sex classification in newspaper employment advertising was held not to infringe First Amendment rights. Although the dissenting opinions in Pittsburgh Press were critical of Chrestensen, the majority relied on that opinion and compared it with New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964), as follows:

The critical feature of the advertisement in Valentine v. Chrestensen was that, in the Court's view, it did no more than propose a commercial transaction, the sale of admission to a submarine. In New York Times Co. v. Sullivan, Mr. Justice Brennan, for the Court, found the Chrestensen advertisement easily distinguishable:

The publication here was not a "commercial" advertisement in the sense in which the word was used in Chrestensen. It communicated information, expressed opinion, recited grievances, protested claimed abuses, and sought financial support on behalf of a movement whose existence and objectives are matters of the highest public interest and concern. 376 U.S., at 266.

In the crucial respects, the advertisements in the present record resemble the Chrestensen rather than the Sullivan advertisement. None expresses a position on whether, as a matter of social policy, certain positions ought to be filled by members of one or the other sex, nor does any of them criticize the Ordinance or the Commission's enforcement practices. Each is no more than a proposal of possible employment. The advertisements are thus classic examples of commercial speech.

So here, in all crucial respects, the "For Sale" and "Sold" signs in themselves resemble Chrestensen rather than Sullivan subject matter. The visible message of a "For Sale" sign is a proposal of a commercial transaction, the sale of a residence. The visible message of a "Sold" sign is an advertisement that a sale transaction has been completed.*fn11 Neither, in itself, contains comment on social policy, grievances, abuses, criticisms, or the like.*fn12

Though the speech herein be primarily commercial, our duty remains one of balancing the governmental interest involved against the precise limitation imposed. As expressed by the Supreme Court in Bigelow :

a court may not escape the task of assessing the First Amendment interest at stake and weighing it against the public interest allegedly served by the regulation.

The preservation of a desirable community impels a priority of the community's needs over the needs of those who would conduct commercial transactions in the community as they see fit, so long as those community needs are reasonably established and the means chosen to meet them do not infringe upon the fundamental constitutional rights of individual businessmen. That the present ordinance denies homeowner-sellers and relators the freedom to continue the use of a particular sales tool is clear, but not fatal. Nor is it new. Constitutionally affirmed laws abound that limit business practices. Nor does the record support the district court's characterization of the denial as "serious." It's effect on plaintiffs is, at most, to slow the pace of sales on the 30% of inquiries received from signs to that of the other 70% received from other sources. Newspaper ads, in-town window displays or other possible means of conveying the desire to sell remain fully available to all. Houses will still be sold, though perhaps not as quickly. Most importantly, fewer may be sold solely because the seller had a fear of minorities. We consider the limited denial occasioned by the ordinance herein to result from a reasonable exercise of the police power in furthering the public welfare by forestalling panic selling and its offspring, segregation.

Linmark and Mellman argue that the governmental interest herein is inadequate. We are persuaded, however, that the concept of the public welfare is of sufficient breadth to uphold the Township's interest in protecting its stable, racially integrated neighborhoods from the destructive segregating effect of a panic selling psychology, and that that Township interest is sufficient to justify a prohibition of "For Sale" and "Sold" signs, the physical embodiments of plaintiffs' commercial speech, on residential property.*fn13

Purpose of the Ordinance

Nothing in the record indicates that the thrust of the present ordinance was the maintenance of a racial balance or imbalance, or that such was the desire of the Council. And nothing of record indicates that "preserving stability" is equatable herein to "racial discrimination" or to the maintenance of a given numerical ratio of white to non-white persons in the community. Only by refusing to sell to a minority buyer anywhere in Willingboro, could any set population ratio of Willingboro be maintained. "Stability" herein, as the record shows, means diminution of the number of neighbors leaving on the basis of fear alone. See Brown v. State Realty Co., 304 F. Supp. 1236, 1238 (N.D. Ga. 1969). Obviously, the absence of signs could not itself control who moves in.*fn14

That the purpose of the ordinance and of the Council was to nip panic selling in the bud, and not to preserve any particular numerical racial balance, was undisputed and was illuminated at the trial by every witness to whom the question was put.*fn15 For example, the Chairman of the Commission, the Rev. Ernest S. Lyght, after stating that there was currently no overt racial conflict but that underlying racial conflicts remained, was asked:

Q. So that the enactment of the ordinance prohibiting for sale signs didn't entirely solve the problem; is that what you are saying?

A. No. And there was no intent on the part of the Commission in making such a recommendation. There was no thought that this was going to somehow solve all racial problems. But it was felt that this was one approach, one aspect of dealing with overall problems, specifically to deal with this matter of creating panic selling, which we have clearly realized could cause a change, see, in the racial balance of the community.

The Court: Do you concern yourselves with such things as balance; and do you mean, for instance, an 80/20 ratio is necessarily a balance?

THE WITNESS: No concern with ratios, absolutely none. Simply the openness and ability to live in the community and anywhere in the community one chooses. No concern with ratios.


Q. So when you use the term "balance," it doesn't have a numerical connotation?

A. No, and probably I shouldn't say balance, but should say complete, total openness.

Q. Is it your impression that the enactment of the ordinance prohibiting for sale signs has in any way caused a lessening or a decrease in the areas of racial or ethnic conflict in the township?

A. I think my specific response would have to be that it's fairly clear to me that the prohibition has stopped or brought to an end the kind of things that we used to hear of, people talking about the rapid change in the community, whether it was in fact or assumed.

Commission member A. W. Porter similarly testified:

If the neighborhood was or is to be all black, and if that is a decision by choice, choice of the individuals involved, then the Commission I believe would have no concerns about that. But if neighbors, residents of the township are being pushed into this kind of thing by the presence of a sign or signs, then I think the Commission's concern would be that that ought not to be, this is not the free choice that people ought to exercise, should exercise.

Councilman Kearns testified:

Q. Now, you said that you, as a councilman and former mayor, were not concerned with minority groups in the community reaching a level of perhaps 20 to 25 percent of the total population; correct?

A. That's correct.

Q. In your discussion in council, was it ever your feeling that the council was utilizing this ordinance to restrict minority groups from moving into town?

A. Absolutely not.

Q. Blacks, Spanish persons, what-have-you?

A. Absolutely not. We were trying to prevent the emotional reaction on the part of sellers. It was in no way related to people moving into the community.

Councilman Heath:

Q. Now, I understand that the percentage of minorities in the community, however, had been ...

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