Art Neon Co. v. City and County of Denver

• Decision Date: 29 November 1973
• Docket Number: No. 73-1404.,73-1404.
• Citation: 488 F.2d 118
• Parties: ART NEON CO. et al., Appellees, v. The CITY AND COUNTY OF DENVER, a municipal corporation, and Anthony H. Jansen, Appellants, Gump Glass Co., Intervenor-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

488 F.2d 118 (1973)

ART NEON CO. et al., Appellees, v. The CITY AND COUNTY OF DENVER, a municipal corporation, and Anthony H. Jansen, Appellants Gump Glass Co., Intervenor-Appellee.

No. 73-1404.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted October 17, 1973.

Decided November 29, 1973.

Rehearing Denied January 17, 1974.

Earl T. Thrasher, Denver, Colo. (Max P. Zall, and Robert M. Kelly, Denver, Colo., with him on the Brief), for appellants.

Alan A. Armour of Hoffman, Goldstein, Armour & Lonnquist, P. C., Denver, Colo., for appellees.

Davis, Graham & Stubbs, Denver, Colo., and Gibson, Dunn & Crutcher, Los Angeles, Cal., on the Brief for amicus curiae, Combined Communications Corp.

Before SETH and DOYLE, Circuit Judges, and TALBOT SMITH, District Judge^*.

SETH, Circuit Judge.

The City and County of Denver, Colorado, and Anthony H. Jansen, the defendants, appeal from the judgment of the United States District Court, 357 F. Supp. 466 for the District of Colorado, which held that portions of the Denver Municipal Code relating to zoning, and more particularly to nonconforming signs, violate the Fifth Amendment of the United States Constitution. Enforcement of the provisions was enjoined. The action was commenced by Art Neon Co., other sign companies, and retail businesses seeking to have portions of the zoning ordinance declared invalid.

Denver is a municipal corporation organized as a "home rule" city, and defendant, Anthony H. Jansen, is the City Zoning Administrator charged with the enforcement of the zoning ordinances, of which Denver Rev.Mun.Code § 613 (1971), the "Permitted Signs" section with which we are here concerned, is a part.

Plaintiffs-appellees, Art Neon Co., Advance Neon Co., Gordon Neon Co., and Epcon, Inc. are engaged in fabricating, installing, repairing, leasing and selling neon, steel, and plastic signs and other advertising displays in Denver. Other appellees are owners or operators of businesses in Denver which lease and have had installed on their premises outdoor advertising signs from appellee sign companies and others. Two appellees own their own signs.

It is apparent from the foregoing that the appellees are connected in a variety of ways with outdoor advertising, and direct their attack on provisions for termination of nonconforming signs in the "Permitted Signs" section of Denver's Zoning Ordinance, Rev.Mun.Code § 613 (1971), and particularly sections 613.5-5(4) and .5(4) (a) thereof, which provide:

".5-4. Termination of Non-Conforming Signs.

* * * * * *

".5-5(4). By Amortization. The right to maintain a non-conforming sign shall terminate in accordance with the following schedule:

                 Any sign which on the date the sign became non-conforming
                 would cost the following amount to replace
                 Shall be terminated within the following period after the sign
                 became non-conforming
                 $0 to $3,000 ............ 2 years
                 3,001 to 6,000 .......... 3 years
                 6,001 to 15,000 ......... 4 years
                 15,001 or more .......... 5 years
                

".5-5(4) (a). The right to maintain a flashing, blinking, fluctuating, animated or portable sign shall terminate within 30 days after such sign became non-conforming."

It appears that the effective date of the "Permitted Signs" section of Denver's Zoning Ordinance was March 19, 1971, and that thereafter the appellees' outdoor advertising signs became, in varying respects, "nonconforming." They commenced this suit asserting that the "Permitted Signs" section was in violation of various provisions of the United States Constitution, including Article I, § 10 (impairment of the obligation of contracts), Amendment V (deprivation of property without due process of law and taking of private property for public use without compensation), Amendment I (restriction on freedom of expression), and Amendment XIV, § 1 (deprivation of equal protection of the laws and of property without due process of law).

After considering whether to abstain from hearing the case, and instead to allow the courts of the state of Colorado to first pass on the claims presented, the district court decided to hear only one issue. This was:

"Whether the requirement that certain existing signs owned by plaintiffs be terminated over the periods prescribed by the ordinance is a valid exercise of the municipal police power or an unconstitutional taking of private property without compensation having been made therefor; or is an unconstitutional impairment of the obligation of certain contracts relating to the leasing of signs owned by plaintiffs." 357 F.Supp. at 467.

The district court, relying on United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218, and Reetz v. Bozanich, 397 U.S. 82, 90 S.Ct. 788, 25 L.Ed.2d 68, declined to exercise pendent jurisdiction over the state law claims and held that these "myriad problems should be left for state court determination." 357 F.Supp. at 467. As to the issue above stated, the trial court held ". . . that the present Denver ordinance does not provide for the payment of just compensation." The court further ruled that the provisions relating to nonconforming signs were in violation of the Fifth Amendment and enjoined enforcement.

The zoning control sought to be exercised by Denver over signs is through a classification according to types which may be displayed in various zoning districts. Signs are not prohibited, but a close limitation is placed on the types permitted. The provision of the ordinance which is in issue is a part of a city wide zoning plan under which the typical property use controls are established. There is no doubt that a general zoning ordinance may be enacted by the City of Denver. Such ordinances are a proper exercise of the police power. Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303; Gorieb v. Fox, 274 U.S. 603, 47 S.Ct. 675, 71 L.Ed. 1228; Green v. Castle Concrete Co., 509 P.2d 588 (Colo.).

As to the scope of police power generally, the Court in Berman v. Parker, 348 U.S. 26, 75 S.Ct. 98, 99 L.Ed. 27, said:

". . . An attempt to define the police power\'s reach or trace its outer limits is fruitless, for each case must turn on its own facts . . .

"Public safety, public health, morality, peace and quiet, law and order — these are some of the more conspicuous examples of the traditional application of the police power to municipal affairs. Yet they merely illustrate the scope of the power and do not delimit it."

Zoning ordinances, including provisions relating to signs, are basically prospective in their application, and this aspect presents no serious problems today. However, there are usually nonconforming uses which present substantial problems. These uses are necessarily inconsistent with the purposes of zoning, Wasinger v. Miller, 154 Colo. 61, 388 P.2d 250, and are not intended to be perpetual. Thus there usually comes a time when such exceptions are sought to be ended. These terminations are in further exercise of the police power, and are sought to be accomplished in several ways. See City of Los Angeles v. Gage, 127 Cal.App.2d 442, 274 P.2d 34.

The ordinance here requires that nonconforming signs must be removed or brought into conformance within a specified period of time after they become nonconforming. This is referred to as "amortization," but in reality it is no more than notice to the owner and user of the sign that they have a period of time to make whatever adjustments or other arrangements they can. This is probably not a proper use of the word "amortization," and so used it contains no connotation of compensation or a requirement therefor. This method is generally regarded as a proper exercise of the police power, although there are strong opinions to the contrary. Some of the more recent cases which have considered the issue include E. B. Elliott Advertising Co. v. Metropolitan Dade County, 425 F.2d 1141 (5th Cir.); Markham Advertising Co. v. Washington, 73 Wash.2d 405, 439 P.2d 248.

The decision to terminate nonconforming uses, and the method to be used, is made by the appropriate legislative body. It is reached by a comparison or balancing of the burden or loss which will be placed on the individual by the ordinance with the public good sought to be achieved. See Hadacheck v. Sebastian, 239 U.S. 394, 36 S.Ct. 143, 60 L.Ed. 348; Board of Supervisors v. Miller, 170 N.W.2d 358 (Iowa). Such a legislative decision under the police power is prima facie a valid factual determination. The parties attacking such an ordinance have to meet a heavy burden. See Green v. Castle Concrete Co., 509 P.2d 588 (Colo.), and Board of County Comm'rs v. Simmons, 494 P.2d 85 (Colo.).

It is obvious that in the balancing process some loss or burden will fall on a sign owner or user. It is not required that the nonconforming property concerned have no value at the termination date. The plan need not be so constructed. The many and varied valid exercises of police power in other areas so demonstrate the impact on the individual. See Goldblatt v. Hempstead, 369 U.S. 590, 82 S.Ct. 987, 8 L.Ed.2d 130; United States v. Central Eureka Mining Co., 357 U.S. 155, 78 S.Ct. 1097, 2 L.Ed. 2d 1288; Hadacheck v. Sebastian, 239 U.S. 394, 36 S.Ct. 143, 60 L.Ed. 348; Mugler v. Kansas, 123 U.S. 623, 8 S.Ct. 273, 31 L.Ed. 205. The legislative determination must only meet the test of "reasonableness," that is, the plan for termination must be "reasonable." Standard Oil Co. v. Marysville, 279 U.S. 582, 49 S.Ct. 430, 73 L.Ed. 856; National Advertising Co. v. Monterey, 1 Cal.3d 875, 83 Cal.Rptr. 577, 464 P.2d 33 (Cal.). This is not a test of concept of "just compensation." The Court in United States v. Central Eureka Mining Co., 357 U.S. 155, 78 S.Ct. 1097, 2 L.Ed.2d 1288, said: "The mere fact that the regulation deprives the property owner of the most profitable use of his property is not necessarily enough to establish the owner's right to compensation." And further in Miller v. Schoene, ...