Costco Companies v. Gallant

In Costco Companies, v. Gallant (2002) 96 Cal.App.4th 740, retailer Costco operated stand-alone stores where it prohibited all expressive activity. At its stores that shared a parking lot with other retail businesses, Costco placed limitations on expressive activity. These limitations included a prohibition on all expressive activity on the 34 busiest retail days of the year and that expressive activity could not be conducted for more than five days during any 30-day period. Only three participants could be on the premises at any one time, and the premises could not be used on weekends. ( Id. at pp. 743-744.) The defendants used Costco locations to collect signatures on referenda and petitions and to register voters. They preferred Costco stores because the stores only had one entrance and exit, and such stores are more productive for signature gathering than stores with multiple avenues for ingress and egress. ( Id. at p. 744.) After there were difficulties enforcing these regulations, Costco commenced an action for injunctive and declaratory relief against the defendants, and the defendants cross-claimed, seeking a judgment invalidating Costco's regulations. ( Id. at p. 744.) Costco presented extensive evidence of the costs imposed upon it by the defendants. Furthermore, there was evidence of numerous customer complaints that because the customers were paying a fee to be a member of Costco, they felt they did not have to be subjected to people who were petitioning. Costco received complaints from some customers that the petition gatherers were following them into the parking lot, would not take "no" for an answer, and would continue to pursue the customers. ( Costco Companies v. Gallant, supra, 96 Cal.App.4th at pp. 750-751.) Costco employees were verbally and physically abused by petition gatherers when they asked the petition gatherers to obey the regulations. There was a concern about escalation in behavior, as people were driving by with automatic rifles pointed at the petitioners. Some of the petitioners expected that Costco was obligated to provide them with protection. Competing groups of petition gatherers would argue with each other. ( Id. at pp. 751-752.) The court found this evidence established interference with Costco's business operations and potential liability claims from customers, employees, and the petition gatherers. ( Costco Companies v. Gallant, supra, 96 Cal.App.4th at p. 753.) Costco's regulations were a reasonable attempt to accommodate the petitioners' free speech rights and its interests in running its business smoothly and profitably. The busiest days of the year rule was a narrowly tailed attempt to preserve ingress and egress on those days when Costco was busiest. The five days out of 30 rule was an attempt to avoid monopolization of the store site by particular groups. ( Id. at pp. 753-754.) The court also upheld the prohibition on all activity at stand-alone stores. Because the public was invited to Costco solely for the purpose of purchasing goods, rather than to dine or congregate, expressive activity could be prohibited consistent with Robins v. Pruneyard Shopping Center (1979) 23 Cal.3d 899. The customers of a Costco stand-alone store had no ability to avoid petition gatherers, thus placing Costco at risk of being identified with the petition gatherers' causes. ( Id. at p. 755.) The Court found that Costco's regulation which prohibited all expressive activities at its stores was valid. The public is invited to Costco's stand-alone stores solely for the purpose of purchasing goods and services. At its stores that shared a parking lot with other retail businesses, Costco placed regulations on expressive activity, including: (1) prohibiting all expressive activity on the 24 busiest retail days of the year; (2) limiting the number of days (no more than five during any 30-day period) when the expressive activity could be conducted; (3) limiting the number of participants that could be on the premises at any one time to three; (4) prohibiting use of the premises on weekends. The Costco case arose when Costco had difficulties enforcing these regulations as to certain defendants who were using Costco locations to collect signatures on referenda and petitions and to register voters. Costco commenced an action for injunctive and declaratory relief against the defendants, and the defendants cross-claimed, seeking a judgment invalidating Costco's regulations. The Court found that Costco's interest in controlling its property outweighed the public's interest in using a Costco store as a public forum. It distinguished a stand-alone Costco store from a large shopping center: "Unlike the patrons of a large regional shopping center, Costco customers do not come to its stores with the expectation they will meet friends, be entertained, dine or congregate. While outlets such as Costco are popular, because of the narrow activity they offer--the purchase of goods and services offered by Costco--they are in no sense '"miniature downtowns."' " (Ibid.)