A federal appeals court has lifted an injunction against a City of Los Angeles billboard inspection fee, finding that the billboard companies that opposed the fee are unlikely to win a First Amendment lawsuit.
In October 2002, District Court Judge Stephen Wilson blocked the city from imposing the $314-per-sign annual fee for inspections of off-site billboards. Judge Wilson concluded that the billboard owners had presented a good case that the fee violated their First Amendment rights. But a unanimous three-judge panel of the Ninth U.S. Circuit Court of Appeal reached the opposition conclusion and lifted the injunction.
The billboard companies “offered no specific evidence that the inspection fee would burden their speech unconstitutionally,” the court held. The decision apparently means the city may collect the fee while the lawsuit goes forward.
At the behest of City Attorney Rocky Delgadillo, the Los Angeles City Council adopted the “off-site sign periodic inspection program” in February 2002. Five months later, the council adopted an ordinance setting the first-year fee at $314. With about 10,000 billboards in the city, the fee would generate approximately $3 million annually for Delgadillo’s vaunted, new crackdown on illegal signage.
Clear Channel Outdoor, Viacom Outdoor and National Advertising Company filed a lawsuit arguing that the city had imposed a “content-based fee on certain speech” in violation of the First and Fourteenth Amendments. Judge Wilson quickly granted the companies’ request for an injunction, finding that the city’s laws favored commercial speech over noncommercial speech, impermissibly differentiated between types of noncommercial speech and between types of commercial speech, and were unconstitutionally vague.
However, the Ninth Circuit found Wilson’s analysis “incomplete in at least three aspects.”
Wilson held that the city could not differentiate between on-site and off-site signs. But the Ninth Circuit ruled that “there is nothing novel or constitutionally infirm” about the on-site/off-site distinction. Writing for the court, Judge Barry Silverman cited the U.S. Supreme Court’s decision in Metromedia v. City of San Diego, 453 U.S. 490 (1981), in which the court ruled that the city could distinguish between on-site and off-site commercial signs.
“A sign’s status as ‘off-site’ or ‘on-site’ … is primarily a function of the permittee’s choice, not the government’s classification,” Silverman wrote.
The billboard companies argued that the distinction discriminated against noncommercial billboards, which by their nature would be off-site. But the city ordinance contained a “substitution clause” that allowed noncommercial messages on either on-site or off-site signs, the Ninth Circuit noted.
Additionally, Wilson, who ruled in October 2002, did not consider an amendment the City Council passed in March 2003 that ensured that the city was not favoring commercial speech over noncommercial speech, the Ninth Circuit ruled. That amendment struck the words “or noncommercial message” from the definition of off-site sign. “This small change is important because it makes it impossible that a noncommercial sign would be designated an ‘off-site’ sign for the purpose of inspection, even if that sign structure is, in the ordinary sense of the term, off-site,” Silverman wrote.
As for the impact on commercial speech, the Ninth Circuit rejected Wilson’s finding that the ordinances were not the most direct approach to addressing the city’s legitimate concerns regarding traffic safety and general aesthetics. Wilson apparently thought the city should have focused on on-site signs, which account for 97.5% of the signs in the city. The appellate panel ruled that a selective program could still be consistent with the city’s goals.
“[I]f an inspection program is designed to advance a valid city interest — reducing the number of dangerous, non-conforming signs — it should not matter that it is underinclusive,” Silverman wrote. “Moreover, as appellees [the billboard companies] all but concede, the city could constitutionally pass an ordinance banning all commercial off-site signs. It makes little sense, then, to argue that adopting a program that merely subjects those signs to inspections would be unconstitutional.”
Finally, the Ninth Circuit found nothing vague about the ordinances.
Clear Channel Outdoor, Inc., v. City of Los Angeles, No. 02-56947, 03 C.D.O.S. 7359, 2003 DJDAR 9236. Filed August 15, 2003.
For Clear Channel: Richard Kendall, Irell & Manella, (310) 277-1010.
For the city: Michael Klekner, city attorney’s office, (213) 485-5420.