The Supreme Court ruled 3 to 0 yesterday that a community can't ban real estate "For Sale" or "Sold" signs because it wants to prevent a feared "white flight" from its racially integrated neighborhoods.
The court said that under the constitutional protection of free speech a town cannot deprive residents of information that may have 2 vital bearing "on one of the most important decisions they have a right to make: where to live and raise their families."
The decision is the third in two years to extend the First Amendment to the flow of "truthful and legitimate" commercial information. In other actions:
The court let stand a decision affirming, the jurisdiction of the National Labor Relations Board over labor relations between lay teachers in parochial schools and the Roman Catholic Diocese of Gary, Ind., which had argued that the NLRB was unconstitutionally interfering in religious matters.
The court agreed to decide whether companies must treat as wages and withhold income taxes on lunch money provided to employees for travel that does not require spending the night away from home.
The "For Sale" sign case came from the Township of Willingboro, N.J. a middle-income community of 45,000 persons and 11,000 homes between Philadelphia and Trenton. Township officials say it is a model of compliance with the federal fair-housing law.
Between 1970 and 1973, the white population declined by nearly 2,000, or 5 per cent, while the nonwhite population grew by more than 3,000 or 60 per cent.
Some township officials, members of the Human Relations Commission and Realtors attributed the decline in white population to "panic selling" by whites who feared that the community was becoming all black and that the value of their homes would drop.
The issue started to come to a head in February, 1973. when nonwhite acounted for 18.2 per cent of the population. The home turnover rate was running at a modest annual rate of 11 per cent. In a typical month, only 2 per cent of the houses were posted with "For Sale" signs. And the tax assessor said that Willingboro properties by the large had increased in value much more than in comparable communities.
But in the belief that a fear psychology had developed, a citizen at a town meeting proposed an ordinance banning "For Sale" signs. The theory - embodied in similar ordinances in communities including Baltimore, Oak Park, Ill., and Shaker Heights, Ohio - was that such signs incite apprehension and finally resegregation.
The Town Council held hearings and then passed the ordinance in March, 1974. A real estate company challenged the ordinance's constitutionality.
A U.S. District Court found "no evidence" that "For Sale" signs had induced a mass exodus of whites and ruled for the company. The Third U.S. Circuit Court of Appeals, however, found that Willingboro was experiencing "incipient" panic selling.
The appellate court upheld the ordinance.Reversing the decision, the Supreme Court held that the ban on "For Sale" signs is consitutionally indistinguishable from a ban on advertisements for an abortion referral agency, which it struck down in 1976.
In an opinion by Justice Thurgood Marshall, the court rejected the township's contention that the ban doesn't violate the First Amendment because it restricts only one method of communications. Such options as newspaper ads and listings with realtors "involve more cost and less autonomy than 'For Sale' signs," Marshall said.
Marshall acknowledged that Willingboro was trying to implement racially integrated housing. "An important governmental objective," but said it had failed to show that the ordinance was necessary to prevent panic selling that, in any event, hadn't been proved to be occurring in significant degree.
But, Marshall said, there is a "far more basic" constitutional defect in the ordinance: if "For Sale" signs can be banned, "then every locality in the country can suppress any facts that reflects poorly on the locality, so long as a plausible claim can be made that disclosure would cause recipients of the information to act 'irrationally.'"
Willingboro has other means available to promote integrated housing, such as encouraging homeowners to put "Not For Sale" signs in their lawns, Marshall added.
In the parochial schools case, the Gary Diocese was supported by the General Conference of Seventh Day Adventists and the American Baptist Churches of the U.S.A which said in friend-of-the-court briefs that there should be immediate resources to the courts in labor cases when schools are an integral part of the mission of a faith. An appeals court rejected this reasoning.
In the lunch case, the Internal Revenue Service said that almost 300 cases pending before it involve the issue off treating as wages money provided to employees on non-overnight travel. The revenues at stake are about $10.3 million. The case taken by the court for review involves the Central Illinois Public Service Co., which in 1963 gave its blue-collar employees $1.40 for lunch, compared with up to $25 for salaried employees.