Court Opinion

ID: 9468583
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:18:15.875276+00
Date Added: 2024-06-11T17:40:56.222040
License: Public Domain

MERRITT, Circuit Judge,
concurring.
I agree with Section III of Judge Celebrezze’s opinion that the use of the name “Sambo’s,” although offensive to blacks, is now commercial speech protected under the First Amendment. On the more difficult waiver issue discussed in Section II of the opinion, it is clear to me that the City of Ann Arbor engaged in an illegal form of economic coercion or duress in order to induce the company to contract away its constitutional right to use the name “Sambo’s.” The City threatened to refuse the building permit, an entitlement for which the company had satisfied all other state and local requirements.
The transcript of the record, as well as the newspaper report quoted in the opinion of the dissenting judge, shows that the mayor of Ann Arbor and members of the council at a council meeting said to the company that they were opposed to the project so long as “Sambo’s” was used as the name. They then refused to pass the resolution permitting the permit to issue. The lawyer for the city then advised the company’s lawyer that the resolution granting the permit would not pass unless the name was changed. The officials did not say to the company in words or effect “We find the name offensive but recognize your right to use it if you insist on it.” They said in effect “We will not issue the building permit so long as you use the name ‘Sambo’s’.” That is the only reading I can give to the record.
*696If the company has a right to use the name under the First Amendment, then the City may not threaten to refuse a building permit in order to induce a waiver any more than it may threaten an assault or other illegal conduct. In exchange for money or other legal consideration, the company may validly contract away its right to use the name “Sambo’s.” But we should not recognize as binding a contract obtained through assault, fraud, duress or extortion. See Restatement of Contracts, ch. 16, Duress and Undue Influence (1937); Restatement, of Restitution, ch. 3, Coercion (1937).
The Restatement of Contracts § 492 (1937) includes in the definition of duress “any wrongful threat . . . that induces another to enter into a transaction under the influence of such fear as precludes him from exercising free will and judgment, if the threat was intended or should reasonably have been expected to operate as an inducement.” In general, duress will render the transaction either void or voidable, id. at §§ 494-95, and the person who conferred the benefit is entitled to restitution. Restatement of Restitution § 70 (1937).
Our legal system does not permit a state or local school board to threaten the parents of black children with economic reprisals or boycotts in order to induce them to enter a contract foregoing their rights to the equal protection of the law. We should not enforce such a contract as a waiver of a constitutional right. Similarly, we cannot give binding effect to a contract or waiver based upon the threat to withhold a building permit until the applicant foregoes protected First Amendment rights.