Posted by: Patricia Salkin | February 1, 2012

NJ Supreme Court Allows Neighboring State to be Considered in the “Relevant Market” in Constitutional Challenge of Restriction on Sexually Oriented Business

A sexually-oriented business was opened in a New Jersey borough.  Shortly thereafter, the borough sued the defendant business seeking to enjoin the operation of the sexually-oriented business for bring in violation of a New Jersey statute.  The New Jersey statute allowed a 1000 foot buffer between any sexually-oriented business and any religious site, public park, school, and residentially zoned areas.  Although the statute had withstood a facial constitutional challenge, the defendants now challenge the statute as unconstitutional as applied.  

Under former holdings by the State and United State Supreme Courts, time, place, and manner restrictions were warranted for sexually-oriented businesses.  Thus, there must be “adequate alternative channels” for the operation of the business that are also “within the relevant market.” At the trial court level, both the borough and the defendants offered expert testimony about the adequacy of alternative locations.  The borough’s expert offered evidence of available locations including Staten Island, New York.  The trial court ultimately agreed with the borough, finding that there were enough alternative locations and upholding the application of the statute.  The appellate division reversed the decision by the trial court, disagreeing with the trial court’s decision to consider Staten Island, New York as an alternative location.  The appellate court specifically determined that a place a business had no political ties to could not be included as an available market.  Since there was a dissent on this issue, the question of whether a trial court can consider alternative locations outside the borders of the state became the issue before the New Jersey Supreme Court here. 

The court began its analysis by explaining that First Amendment rights in sexually-oriented businesses could be restricted by statutes such as the one in New Jersey.  The court next explained that the statute is tested by a “regional market” and, thus, concluded that a neighboring state may be considered as part of that market.  The court presented five reasons for its decision.  

First, the court found it may actually be more convenient for residents to travel outside of the state; many New Jersey residents often travel to New York for employment and other entertainment.  Second, explained the court, there was evidence presented that citizens often travel out of state for this type of entertainment.  Third, the statute left the evaluation of suitable alternatives in the hands of experts; these experts should determine how to define a region.  Fourth, the court found that restricting the market to only municipalities is an unfair treatment to businesses in municipalities on the boarder of another state since their scope is limited.  Finally, the court refuted the argument that businesses do not have any influence over the laws in other states by explaining that this ignores the fact that they also do not necessarily have influence on other municipalities in New Jersey. 

The court concluded by explaining that they intend this opinion to be narrowly read.  Thus, if all or even most viable alternatives are in another state, this opinion would not apply and the restriction would likely constitute a constitutional violation.  

Sayreville v. 35 Club, LLC, 2012 WL 143604 (NJ 01/19/2012) 

The opinion can be accessed at:

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