Discussing a New Jersey state court's application of the state's constitutional free speech provision to a homeowner's association, Will Baude remarks, "[S]tates have been holding private shopping malls subject to state free speech guarantees for some time (and somehow evading the federal takings clause in the process). So this is a pretty obvious next step." Perhaps it is due to the spin that my constitutional and property law professors put on the company town and shopping mall decisions, or a difference between the federal versus state judges' reasoning in them, but the move from those to interfering with individual contract doesn't strike me as obvious at all. (I am limiting my initial comments to the paradigmatic "Why can't I put political signs in my own yard?" complaint; there's more to the New Jersey case, which really arises from a dispute about how to govern the association and secondarily about the right to speak about the dispute.)
The Supreme Court precedents didn't involve deeming "the liberty to contract ... of less importance than the liberty to break said contracts in order to put up political signs." As I recall, there was something of an insider-outsider dynamic to those cases: people from outside the company town wanted access to the people inside and were tossed out of the town as trespassers when they attempted to make speech that the company didn't particularly want; people who were not shopkeepers of the mall wanted access to the patrons and were tossed out for the same. Inasmuch as there were contracts in those cases, between the employee/ inhabitants of the town and the company, and between the vendors and the mall owners, no one was asking to violate those contracts, and the Jehovah's Witnesses and petition-signature-gatherers never contracted away their right to speech. The New Jersey plaintiffs "contend that their status as residents of a private community, rather than visitors to private property, strengthens their position."
The New Jersey court's taking the battle between the homeowners' associations versus dissenting homeowners to be a matter of property rights versus free speech doesn't appear wholly appropriate. After all, the homeowners presumably own their property, as there are condominiums but not co-ops. Instead, while the court disdained the term "quasi-municipal," it declared,
We are called upon to determine whether the standard-setting and standard-applying exercises at issue are essentially in performance of public functions or impact with sufficient directness upon public interests to call into play the constitutional limitations that classically apply to public sector actors, but which the New Jersey Constitution applies more broadly.The state of New Jersey has granted associations the power to impose fines, and the court describes the association as the property holder of communal space more often than it calls the plaintiffs to be owners in their own right. Contract is not much noticed, except to declare that it along with the business judgment rule standards did not apply to the case, and to agree with the motion judge that the $1000 in liquid damages imposed for breaching the confidentiality of a housing association membership list "was a patently unfair contract ofadhesion, which no reasonable person would voluntarily accept."
Indeed, the non-owners who dwell in the community -- the tenants who are not members of the Association -- did not have their claim to political rights within the community recognized. "But a court cannot craft a more favorable contract than the one the parties themselves have entered into, to grant tenants rights they are not otherwise entitled to and are not included in their lease."
Considering the grounds on which the New Jersey state court ruled, the chance of a federal challenge based on BSA v. Dale succeeding seems small.