436 F.3d 1064 (9th Cir. 2006), 04-35416, G.K. Ltd. Travel v. City of Lake Oswego

Docket Nº:04-35416.
Citation:436 F.3d 1064
Party Name:G.K. LTD. TRAVEL, an Oregon corporation; WH Gillison; Ramsay Signs, Inc., an Oregon corporation; Kathleen Kusudo, Plaintiffs-Appellants, v. CITY OF LAKE OSWEGO; Sandy Ingalls, Defendants-Appellees.
Case Date:January 26, 2006
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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436 F.3d 1064 (9th Cir. 2006)

G.K. LTD. TRAVEL, an Oregon corporation; WH Gillison; Ramsay Signs, Inc., an Oregon corporation; Kathleen Kusudo, Plaintiffs-Appellants,


CITY OF LAKE OSWEGO; Sandy Ingalls, Defendants-Appellees.

No. 04-35416.

United States Court of Appeals, Ninth Circuit.

January 26, 2006

Argued and Submitted Sept. 15, 2005.

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John F. Winston (argued), Sherwood, Oregon, and Douglas M. Bragg, Tualatin, Oregon, for the plaintiffs-appellants.

Timothy J. Sercombe (argued) and Carra L. Sahler, Preston, Gates & Ellis, LLP, Portland, Oregon, for the defendants-appellees.

Appeal from the United States District Court for the District of Oregon Garr M. King, District Judge, Presiding D.C. No. CV-02-01147-GMK

Before: FISHER, GOULD and BEA, Circuit Judges.

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FISHER, Circuit Judge

Plaintiffs-appellants ("plaintiffs") are the owners of a pole sign used to advertise their travel business in the City of Lake Oswego ("City").1 With the stated purpose to reduce visual blight and protect traffic and traveler safety, the City has enacted a sign code ordinance ("Sign Code" or "Code") regulating the type, size and design of all signs erected within its borders. The Sign Code prevents plaintiffs from continuing to use their pole sign, because that form of sign is severely restricted. Plaintiffs challenge the constitutionality of the Sign Code, raising multiple as-applied and facial claims. The district court granted summary judgment to the City, in large part, and plaintiffs appeal. We have jurisdiction pursuant to 28 U.S.C. § 1291, and affirm.

I. Background

A. Plaintiffs' Pole Sign

Plaintiff Ramsay Signs, Inc. ("Ramsay") owns a 42.5-square-foot pole sign that has been used since 1980 in Lake Oswego. Ramsay leased its pole sign to Journeys! of Lake Oswego ("Journeys!") in 1996 for the purpose of advertising the Journeys! travel business. In February 2001, plaintiff G.K. Ltd. Travel ("G.K.") purchased Journeys! along with the pole sign lease and instructed Ramsay to change the copy of the pole sign to advertise G.K.'s travel business. Ramsay accordingly changed the text on the sign from "Journeys! of Lake Oswego, Formerly Apollo Travel" to "G.K. Ltd. Travel Groups Tours Cruises Complete Travel Services Domestic & International." The City's Code Enforcement Specialist, Sandy Ingalls, notified the plaintiffs that because they were changing the copy on their pole sign as a new business, the sign had to conform with the Sign Code. Conformity, in this case, meant removing the sign altogether because the Sign Code prohibits pole signs in Lake Oswego unless statutorily defined special circumstances exist, none of which were applicable to plaintiffs. See LOC § 47.04.100(1).2

Plaintiffs sought and were denied a permit to change their pole sign's text without having to remove the sign itself. The City eventually cited plaintiffs for violating the Sign Code and insisted that plaintiffs remove the pole sign. Plaintiffs then sought a variance for their sign, but this too was denied by the City Planning Director. Plaintiffs appealed the variance denial to the City Development Review Commission and the City Council, both of which affirmed the Planning Director. Plaintiffs then filed suit in federal district court.

Plaintiffs insist that their pole sign is a cheap, effective and significant means of attracting clients and, without the sign, plaintiffs will lose a substantial amount of income. Plaintiffs seek to have the Sign Code declared unconstitutional.

B. The Sign Code

As stated in a memorandum of the City of Lake Oswego's Department of Planning and Development, the Sign Code is the City's response to a State of Oregon instruction

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to cities and counties to adopt comprehensive land use plans with the aim of "encourag[ing] design of public and private facilities and structures which enhance community beauty." See Or. Rev. Stat. § 197.175(2)(a). In 1994 the City passed the current version of the Sign Code in order to cure earlier perceived constitutional defects. By regulating all signs in the City, the Sign Code seeks, among other things, to reduce visual clutter, preserve the City's aesthetics and protect traffic and traveler safety. See LOC § 47.03.010 ("The City Council finds that to protect the health, safety, property and welfare of the public, to provide the neat, clean, orderly and attractive appearance of the community ...."). In developing and amending the Sign Code, the City's Planning Commission conducted public hearings, considered the success other cities had experienced with their own sign codes and reviewed an Urban Land Institute study on signage and communities. Notably, during Council deliberations concerning the Sign Code, businesses presented recommendations to the City, many of which were incorporated.

The Council's consultative process culminated in the current Code, which limits the number and type of signs permitted in the City. The Code lays out specifications for all signs and, importantly for plaintiffs, generally prohibits pole signs. The Code is not triggered for the many preexisting signs in most of the City's zones until a new business or use requires a change in copy of the sign or the sign is altered.3 LOC § 47.04.100 (the "grandfather clause"). However, pole signs had to conform to the Sign Code by May 21, 2004; in other words, almost all pole signs in Lake Oswego were to have been removed by this date. See G.K. Ltd. Travel v. City of Lake Oswego, 2004 WL 817142, at *1, 2004 U.S. Dist. LEXIS 6984 at *3 (D.Or. Mar. 29, 2004) ("G.K. Ltd. Travel I "). In addition to regulating the dimensions and characteristics of all signs in the City, the Code includes a permit and design review process that requires those seeking to erect a sign to allow City officials to review the sign for readability, clarity and compatibility. LOC §§ 47.10.400, 47.06.200(4), 47.06.200(5). If a permit is denied, the permit-seeker may appeal to the City Development Review Commission and ultimately to the City Council. The Code also contains exemptions from the City's permitting process. If an exemption applies, the sign still must "comply with all provisions and regulations of [the Code]," but a permit is not required prior to installation. LOC §§ 47.06.205, 47.08.300. Specifically, the Code exempts "[p]ublic signs, signs for hospital or emergency services, legal notices, railroad signs and danger signs" from the permitting process. LOC § 47.06.205(4). The Code also exempts temporary signs from the permitting requirement so long as the temporary sign goes up within a specified time period triggered by the occurrence of an enumerated event, such as an election or the sale, lease or rental of property.4 See, e.g., LOC § 47.08.300(B)(1). Finally, the Code incorporates a variance procedure to ease the burden of the Code's application in some cases. LOC § 47.12.500.

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C. Plaintiffs' Claims

Focusing on the Sign Code's restrictions on pole signs, plaintiffs raise two as-applied challenges to the Code claiming that the Code's size and type limitations and the Code's grandfather clause unconstitutionally regulate plaintiffs 'speech on the basis of content. Plaintiffs want these provisions stricken from the Sign Code and suggest that without these provisions, the balance of the Sign Code should be rendered unenforceable. Plaintiffs further claim that the ban on pole signs is an unconstitutional ban on a protected medium of speech as applied to the plaintiffs, because pole signs are "a unique form of communication."

Plaintiffs also attack the Sign Code by way of several facial challenges, asserting that they are entitled to declaratory, injunctive and monetary relief. Plaintiffs argue that the Code, particularly its exemptions from the permitting process, its grandfather clause and its design review process allowing officials to read signs for clarity and readability, represents a facially unconstitutional regulation of noncommercial and commercial speech based on content or viewpoint, or alternatively represents an unreasonable time, place or manner regulation. They also challenge the Code as a facially unconstitutional preference for commercial over noncommercial speech because of the treatment of temporary signs in residential zones. LOC § 47.08.300(B). Finally, plaintiffs claim the permitting scheme (including the design review provision of the Code), LOC §§ 47.10.400, 47.06.200(4), is an unlawful prior restraint on speech and unconstitutionally vague.5

D. District Court Disposition

The district court, in large part, granted summary judgment for the City. In ruling on the content neutrality of the Sign Code, the district court meticulously reviewed provisions of the Code challenged by plaintiffs as content based. The district court determined that the vast majority of the provisions were content neutral, but found that a limited portion of the Code was content based. Specifically, citing Desert Outdoor Adver. v. City of Moreno Valley, 103 F.3d 814, 820 (9th Cir. 1996), the district court found content based the exemptions from the permit requirements for danger signs, official notices and "no solicitation" signs, LOC §§ 47.06.205(4), 47.06.205(10). It also found content based the allowance, without a permit, of temporary signs in commercial or industrial zones for charitable fundraising events, LOC § 47.08.300(B)(2)(c), because the court found it represented the City's preference for a certain message. The district court ordered these subsections stricken from the Sign Code, but found the Code otherwise constitutional. G.K. Ltd. Travel I, 2004 WL 817142, at *8-*9, *15-*16, 2004 U.S. Dist...

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