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ILL. ASS'N OF REALTORS v. VILLAGE OF BELLWOOD

June 16, 1981

ILLINOIS ASSOCIATION OF REALTORS, ET AL., PLAINTIFFS,
v.
VILLAGE OF BELLWOOD, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Grady, District Judge.

Plaintiffs brought this action for declaratory and injunctive relief challenging the constitutionality of two Bellwood ordinances. Before the court is plaintiffs' motion for summary judgment. The motion is granted.

The text of each ordinance is set forth in an appendix to this opinion, and we will therefore provide only a brief description here. Ordinance 77-23 is entitled "An Ordinance Regulating Real Estate Solicitation In The Village of Bellwood, Cook County, Illinois" and provides that before any real estate agent "enters into any form of real estate solicitation for listings in the Village of Bellwood," the agent must obtain a permit from the Village government. An application must be submitted to the Citizens Advisory Council ("the Council") which shall refuse to issue the permit "if in the opinion of the Council, said solicitation shall be deemed detrimental to the welfare of the community," in violation of Bellwood's anti-panic peddling ordinance or in violation of its Fair Housing Ordinance, "either in intent or effect." Solicitations made in violation of the ordinance subject the offender to a fine of not less than $50.00 nor more than $500.00 for each violation.

Ordinance 77-2 is entitled "An Ordinance Requiring Notification Of Intent To Sell Or Rent Residential Property" and requires that "all owners, agents, Brokers or any individual or legal entity having ownership or control of any residential property which is offered for sale or rental within the Village of Bellwood, must notify the Village . . . five days after the first real estate listing agreement is entered into, and or public notification of such intent to sell is made, whichever shall occur first." Failure to give the notice subjects the offender to a fine of not less than $5.00 and not more than $500.00 for each day on which a violation occurs.

Plaintiff Illinois Association of Realtors is a not-for-profit corporation consisting of over 300 members who are engaged in the real estate business in Bellwood. The Association is dedicated, inter alia, to "recommend[ing] and promot[ing] legislation which will safeguard and advance the interest of property ownership" and to "provid[ing] a unified medium for real estate owners and those engaged in the real estate business whereby their interests may be safeguarded and advanced." By-Laws, ¶¶ 4, 8, Complaint, ¶ 4. Plaintiffs Francis M. Davies, John M. Davies and John M. Davies, III are engaged in the realty business in Bellwood under the name Davies Realty Shop. Plaintiff Ora Dee Williams is also a realtor in Bellwood and operates Donora Realty. The employees of both realty companies have submitted affidavits stating that they have "in the past engaged in lawful solicitation for real estate listings" and desire to continue "to engage in such solicitation in the future." Davies Affid., ¶ 4; Williams Affid., ¶ 4.*fn1

Plaintiffs have filed a two-count complaint for declaratory and injunctive relief. In Count I, plaintiffs allege that Ordinance 77-13 is facially invalid in that it imposes an unconstitutional prior restraint on their efforts to solicit business and is impermissibly overbroad and vague. In Count II, plaintiffs claim that Ordinance 77-2 also is unconstitutionally vague and denies equal protection.*fn2

I. Ordinance 77-13

The kind of speech in which plaintiffs wish to engage and which Ordinance 77-13 regulates is entitled to First Amendment protection. Linmark Associates, Inc. v. Willingboro, 431 U.S. 85, 97 S.Ct. 1614, 52 L.Ed.2d 155 (1977); Virginia Board of Pharmacy v. Virginia Consumers Council, 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). Brokers play a key role in the real estate market by linking buyers with sellers. Although brokers do "no more than propose a commercial transaction," Pittsburgh Press Co. v. Human Relations Commission, 413 U.S. 376, 385, 93 S.Ct. 2553, 2558, 37 L.Ed.2d 669 (1973), their efforts doubtlessly aid in "the proper allocation of resources" through enhancing the "flow of commercial information." Virginia Board of Pharmacy, 425 U.S. at 764, 96 S.Ct. at 1827. In serving the important societal goal of allocative efficiency, real estate solicitation merits some First Amendment protection.

The conclusion that plaintiffs' commercial speech merits some First Amendment protection does not answer the harder question, namely, how much protection. The Supreme Court has stated that for purposes of First Amendment analysis, "Certain features of commercial speech differentiates it from other varieties of speech in ways that suggest that `a different degree of protection is necessary to insure that the flow of truthful and legitimate commercial information is unimpaired.'" Friedman v. Rogers, 440 U.S. 1, 10, 99 S.Ct. 887, 894, 59 L.Ed.2d 100 (1979). For this reason, the Court's "decisions dealing with more traditional First Amendment problems do not extend automatically to this as yet uncharted area." Id. at 11 n. 9, 99 S.Ct. at 895 n. 9. Further, the special characteristics of commercial speech may "allow [for] modes of regulation that might be impermissible in the realm of non-commercial expression." Ohralik v. Ohio State Bar Association, 436 U.S. 447, 456, 98 S.Ct. 1912, 1918, 56 L.Ed.2d 444 (1978).

In particular, the Court has noted that the traditional prohibition on prior restraints may not apply to regulation of speech which merely proposes a transaction. Virginia Board of Pharmacy, 425 U.S. at 772 n. 24, 96 S.Ct. at 1831 n. 24. The Court has also held that the overbreadth doctrine, a tool for judicial scrutiny of laws which implicate First Amendment interests, might not be applicable to commercial speech cases. Since two of plaintiffs' three arguments for invalidating Ordinance 77-13 are that it imposes an unconstitutional prior restraint and is impermissibly overbroad, we think it necessary to explore the applicability of these two limiting doctrines with respect to commercial speech cases in general and the instant case in particular.

As a preliminary matter, we note that Ordinance 77-13 imposes a prior restraint on the flow of market information. The elements of a prior restraint are (1) the person desiring to engage in the communication must apply to a government agent prior to engaging in the desired communication; (2) the government agent is empowered to grant or deny the application on the basis of the content of the proposed communication; (3) approval of the application depends on the agent's affirmative action; and (4) approval is not routinely granted but is the result of the exercise of the agent's judgment. Southeastern Promotions Ltd. v. Conrad, 420 U.S. 546, 554, 95 S.Ct. 1239, 1244, 43 L.Ed.2d 448 (1974); Cantwell v. Connecticut, 310 U.S. 296, 305, 60 S.Ct. 900, 904, 84 L.Ed. 1213 (1940). Each of these elements is present in Ordinance 77-13. Before soliciting, a broker must apply to the Village for a permit. The Village may grant or deny the application on the basis of content. Approval of a broker's request depends entirely on the Village's affirmative action. And finally, approval is based on the Council's judgment as to whether the proposed solicitation would be "detrimental to the welfare of the community."*fn3

Having determined that Ordinance 77-13 imposes a prior restraint, we now consider whether prior restraints are permissible in this area and, if so, under what circumstances they may be constitutionally imposed. In the more traditional First Amendment areas, the Court has held that "[P]rior restraints are not unconstitutional per se," but that there is a "heavy presumption against [their] constitutional validity." Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 558, 95 S.Ct. 1239, 1246, 43 L.Ed.2d 448 (1975); Bantam Books v. Sullivan, 372 U.S. 58, 70, 83 S.Ct. 631, 639, 9 L.Ed.2d 584 (1963); New York Times Co. v. U.S., 403 U.S. 713, 714, 91 S.Ct. 2140, 2141, 29 L.Ed.2d 822 (1971). In these cases, the Court has required that statutes allowing for censorship "first must fit within one of the narrowly defined exceptions to the prohibition against prior restraints and, second, must have been accomplished with procedural safeguards that reduce the danger of suppressing constitutionally protected speech." Southeastern Promotions, 420 U.S. at 559, 95 S.Ct. at 1247; Freedman v. Maryland, 380 U.S. 51, 58, 85 S.Ct. 734, 738, 13 L.Ed.2d 649 (1965).

Whether some forms of commercial speech such as real estate solicitation might be added to the few "narrowly defined exceptions to the prohibition against prior restraints" depends on the strength of the interests the government seeks to protect. Thus, for example, it has been suggested that the government may restrain the publication of certain information during time of war. Near v. Minnesota, 283 U.S. 697, 716, 51 S.Ct. 625, 631, 75 L.Ed. 1357 (1931). Similarly "the security of the community life may be protected against incitements to acts of violence and the overthrow by force of orderly government." Ibid. The publication of the Pentagon Papers, on the other hand, did not implicate sufficiently important interests to justify censorship. New York Times Co. v. U.S., 403 U.S. 713, 91 S.Ct. 2140, 29 L.Ed.2d 822 (1971). In stating that the prohibition against prior restraints may not apply to commercial speech cases, the Court cited a number of cases, all of which stand for the proposition that prior restraints are available to prevent what has been found to be false and misleading advertisements and trade practices.*fn4 While it appears that the government has strong enough interests to subject false and misleading commercial information to prior restraints, the issue before us is a different one: viz. whether the government may place prior restraints on the communication of apparently truthful commercial information which is otherwise deemed to be harmful.*fn5 There is no quick answer to this question, and it cannot be resolved by the papers before us. The strength of Bellwood's interests in promulgating Ordinance 77-13 can be determined only on the basis of more evidence than we presently have. However, the strength of the government's interests in suppression of speech is only one of two criteria for determining the validity of prior restraints. Additionally, "[A] system of prior restraint avoids constitutional infirmity only if it is accomplished with procedural safeguards that reduce the danger of censorship." Southeastern Promotions, 420 U.S. at 559, 95 S.Ct. at 1247; Freedman v. Maryland, 380 U.S. at 58, 85 S.Ct. at 738; Bantam Books v. Sullivan, 372 U.S. at 70-71, 83 S.Ct. at 639-640. These procedural safeguards include:

  First, the burden of instituting judicial
  proceedings, and of proving that the material is
  unprotected, must rest on the censor. Second, any
  restraint prior to judicial review can be imposed
  only for a specified brief period and only for
  the purpose of preserving the status quo. Third,
  a prompt final judicial determination must be
  assured.

Southeastern Promotions, 420 U.S. at 560, 95 S.Ct. at 1247.

We understand defendants to argue that these procedural safeguards were designed to protect against state intrusions into kinds of speech which involve more significant First Amendment values than those implicated by the commercial speech at issue here. Hence, defendants conclude that in regulating the relatively less significant speech in which plaintiffs wish to engage, Ordinance 77-13 may dispense with these procedural safeguards.

We disagree. The procedural safeguards established in the prior restraint cases are founded on the concern for reducing as much as possible the risk of suppressing constitutionally protected speech. Southeastern Promotions, 420 U.S. at 559, 95 S.Ct. at 1246; Freedman v. Maryland, 380 U.S. at 57-59, 85 S.Ct. at 738-739. The government runs that risk, of course, whenever it engages in censorship. The risk may be greater where the speech involved is subject to greater protection. Conversely, when the censored speech is commercial in nature, the risk of suppressing protected speech may lessen. But the risk does not disappear completely. When the censor becomes overzealous and the risk of suppressing constitutionally protected speech becomes a reality, the result is no less obnoxious to First Amendment values because the content of the speech happens to be commercial. Thus, the important point is not that the suppressed speech is commercial; the important point is that it is protected.

The Supreme Court has recognized that the censorship of any protected speech without the procedural safeguards is inconsistent with the First Amendment, even where the suppressed speech embodies less significant First Amendment values. Thus, in Blount v. Rizzi, 400 U.S. 410, 91 S.Ct. 423, 27 L.Ed.2d 498 (1971), the Court held unconstitutional a statute allowing the Postmaster to return to the sender letters posted for the purpose of obtaining or seeking money for "obscene matter." The statute was defective, said the Court, since it imposed a prior restraint without the requisite safeguards mandated by Freedman v. Maryland, 400 U.S. at 417, 91 S.Ct. at 428. If a statute which restricts access to the mails of persons sending obscene materials — a form of communication not held in high constitutional repute — must contain the procedural safeguard, we have no doubt that similar safeguards must be employed in the case at bar.

We find that Ordinance 77-13 is utterly devoid of the procedural safeguards required of legislative enactments which impose a prior restraint. The ordinance does not place on the Village the burden of initiating enforcement proceedings or of proving that the solicitations are unprotected. Rather, the Council's decision appears to become effective without judicial approval. Nor does the statute provide for expedited decisions by the Council. On the contrary, Section IV of the ordinance states that the Council shall review the applications "only at its regular meetings." The Council may meet weekly or even monthly. We do not know. But regardless of the frequency of the meetings, the ordinance is inadequate in that it places the timing for making decisions entirely in the hands of the censor. Additionally, Section VII provides that "[N]o person shall file for said solicitation more than once in a six month period." Thus, taking ...


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