Clear Channel Outdoor, Inc. v. City of New York

• Decision Date: 31 March 2009
• Docket Number: No. 06 Civ. 8193 (PAC).,No. 06 Civ. 8219 (PAC).,No. 07 Civ. 8244 (PAC).,06 Civ. 8193 (PAC).,06 Civ. 8219 (PAC).,07 Civ. 8244 (PAC).
• Citation: 608 F.Supp.2d 477
• Parties: CLEAR CHANNEL OUTDOOR, INC., Plaintiff, v. The CITY OF NEW YORK and Patricia J. Lancaster, in her official capacity as Commissioner of the New York City Department of Buildings, Defendants. Atlantic Outdoor Advertising, Inc., Scenic Outdoor, Inc., Troystar City Outdoor LLC, and Willow Media, LLC., Plaintiffs, v. The City of New York, Patricia J. Lancaster, and Edward Fortier, Defendants. Metro Fuel LLC, Plaintiff, v. City of New York, Defendant.
• Court: U.S. District Court — Southern District of New York

608 F.Supp.2d 477

CLEAR CHANNEL OUTDOOR, INC., Plaintiff, v.The CITY OF NEW YORK and Patricia J. Lancaster, in her official capacity as Commissioner of the New York City Department of Buildings, Defendants.

Atlantic Outdoor Advertising, Inc., Scenic Outdoor, Inc., Troystar City Outdoor LLC, and Willow Media, LLC., Plaintiffs, v.The City of New York, Patricia J. Lancaster, and Edward Fortier, Defendants.

Metro Fuel LLC, Plaintiff, v.City of New York, Defendant.

No. 06 Civ. 8193 (PAC).

No. 06 Civ. 8219 (PAC).

No. 07 Civ. 8244 (PAC).

United States District Court, S.D. New York.

March 31, 2009.

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Linda Jane Steinman, James Eric Rosenfeld, Victor A. Kovner, Davis Wright Tremaine LLP, New York, NY, for PlaintiffClear Channel Outdoor, Inc.

Richard D. Emery, Andrew G. Celli, Eric Hecker, Ilann M. Maazel, Emery Celli Brinckerhoff & Abady, LLP, New York, NY, for PlaintiffsAtlantic Outdoor Advertising, Inc., Scenic Outdoor, Inc., Troystar City Outdoor LLC and Willow Media, LLC.

Sheryl Rebecca Neufeld, NYC Law Department, Office of The Corporation Counsel, New York, NY, for Defendants The City of New York, Patricia J. Lancaster and Edward Fortier.

Michael Stephen Gruen, Debra Kobrin Levy, Vandenberg & Feliu, LLP, New York, NY, for Defendant Municipal Art Society of New York.

OPINION & ORDER

Honorable PAUL A. CROTTY, District Judge:

The pending cases are another chapter in New York City's seven-decade attempt to control where outdoor advertising companies locate certain commercial billboards and street signs.Since 1940, New York City's zoning regulations have banned outdoor advertising companies from placing commercial billboards, which do not advertise an on-premise business, within 200 feet and within view of the City's major parkways and roadways, also known as "arterial highways."The City's enforcement of its zoning regulations has been inconsistent and less than vigorous.The billboard industry has taken advantage of this lax enforcement and has consistently ignored the regulations on billboard sign location.

The first case is the consolidated action of PlaintiffsClear Channel Outdoor, Inc., Atlantic Outdoor Advertising, Inc., Scenic Outdoor, Inc., Troystar City Outdoor, LLC, and Willow Media, LLC(together, the "Clear Channel Plaintiffs").They own large billboards located near arterial highways in New York City.The second case involves PlaintiffMetro Fuel, LLC("Metro Fuel"), an owner of significantly smaller "panel" advertising signs that are situated on building fronts and poles close to the street, but are illuminated in a manner contrary to the zoning rules.

The Plaintiffs challenge the City's updated restrictions that: (1) limit the location and illumination of these commercial billboards and smaller signs; and (2) create strict permitting and registration procedures for existing outdoor signs.The Plaintiffs claim that the restrictions infringe upon their commercial free speech rights under the First and Fourteenth Amendments to the United States Constitution, and under the New York State Constitution.The City asserts that the regulations further its interest in improving traffic safety and aesthetics.When put into effect the regulations will impact Plaintiffs' business revenue from the rental of outdoor advertising signs because many existing signs will not conform to the location limitations embodied in the zoning regulations.

The Clear Channel Plaintiffs and Metro Fuel argue that the City enforces its zoning regulations unevenly, and, in certain cases, in a manner that unconstitutionally favors the City in violation of First Amendment speech protections.Plaintiffs recognize, as they must, that the City is entitled to regulate outdoor advertising, but they argue that the City cannot regulate in the way that it intends.Plaintiffs claim that the City's regulatory scheme is riddled with exceptions that undermine its efficacy to the point of unconstitutionality.Notwithstanding their unlawful behavior, both sets of plaintiffs seek equitable relief in the form of a preliminary injunction against the City's enforcement of the zoning rules.The City also moves for summary judgment against both plaintiffs, and the Clear Channel Plaintiffs and Metro Fuel cross-move for summary judgment.For the reasons that follow, the Court holds that the Zoning Resolution's restriction on the Plaintiffs' commercial speech rights is not unconstitutional and the City may enforce the arterial highway advertising ban, the registration regulations, and the location restrictions on internally illuminated advertisements.Accordingly, the Defendants' motions for summary judgment are GRANTED in both cases and the Plaintiffs' motions for summary judgment and a preliminary injunction are DENIED.

BACKGROUND

The factual background applies to both the Clear Channel Plaintiffs and to Metro Fuel.The facts in this section are derived from Plaintiffs' Complaints, the parties' statements of fact submitted pursuant to Local Rule 56.1, the parties' stipulations of fact, and supporting affidavits and exhibits, unless otherwise specified.

I.History of New York City's Regulation of Outdoor Advertising

The claims and issues presented here cannot be fully understood without a brief recitation of the seven-decade history of New York City's regulation of outdoor advertising.The outdoor advertising companies have long ignored or failed to comply with City regulation.They have adopted a variety of tactics, ranging from direct challenges to the City's enforcement efforts in court; waiting until the City's enforcement fever wanes and enforcement efforts again abate; or hoping for a new administration which may have other priorities.These defensive tactics are effective because of the City's sporadic and lackadaisical enforcement of its zoning regulations.Time has worked to the advantage of the commercial billboard companies and the City has, at times, chosen to ignore past transgressions and instead grandfather out-of-compliance signs.

a. Regulation from 1940 to 2001

In 1940, New York City restricted outdoor advertising signs in districts zoned for residential use and in all areas within 200 feet and in view of arterial highways¹ and City parks larger than one-half acre.(SeeDeclaration of Sheryl Neufeld ("Neufeld Decl.")¶ 5;Stipulations of Fact ("SOF")¶ 6, located at Declaration of Eric Hecker ("Hecker Decl.")Ex. 1.)At that time the City Planning Commission("CDP1") determined that billboard regulation was needed because "[b]illboards and signs not only dominate our business streets ... but they take advantage of every opportunity to crowd in upon public places, established and maintained by public funds, including civic centers, parks, and especially express highways and bridge approaches."(Defendants' ("Def.") Ex. Aat 90(containing Major Reports of the City Planning Commission, 1940).)²

The regulations, then and now, distinguish between "accessory use" signs, which are signs located on the premises to which the sign directs attention, and "advertising signs," which are signs that direct attention to a business or service conducted elsewhere.N.Y. City Zoning Resolution ("Z.R.")§ 12-10.³A sign is not an advertising sign for purposes of the Zoning Resolution if it is an accessory use sign—that is, if it is promoting a business located on the premises.Id.Accessory signs are also referred to as "on-site" signs, while advertising signs are also referred to as "off-site" signs.The zoning rules enacted in 1940 distinguished between those two uses because on-site accessory use signs served the valuable economic purpose of identifying the business on the premises.(SeeDef. Ex. Aat 90.)The Zoning Resolution permits advertising signs within the Times Square zoning district because signs in that area are "principal and traditional attractions."(Id.)

In 1961 the City adopted a comprehensive Zoning Resolution which carried on the general framework from the 1940 regulations.Of relevance to Metro Fuel's challenge, the 1961 Zoning Resolution also added certain sign location and illumination restrictions.Outdoor advertising companies, however, frequently ignored the City's ordinance and erected arterial advertising signs in violation of the zoning regulations.(SeeSOF ¶ 7.)In 1979-80, as the City's fiscal crisis was coming to an end, the City faced a loss of $25 million in federal highway aid, unless it complied with the Federal Highway Beautification Act and enforced provisions of its Zoning Resolution.In 1980, after determining that enforcement was economically impracticable, the City grandfathered the outdoor signs that did not comply with the Zoning Resolution but did comply with less restrictive federal and state standards.(Id.¶ 8.)Thus, many signs existing on or before November 1, 1979 were granted "non-conforming use" status and remain exempt to this day from the ban on arterial advertising.SeeZ.R. §§ 42-55, 32-662.

Despite the exemption for pre-1980 signs and the prohibition on additional arterial advertising signs, outdoor advertising companies continued to build illegal signs.Sometimes the billboard companies would obtain accessory-use sign permits and then illegally convert the accessory copy to off-site advertising copy.(SOF ¶ 9;see alsoAffirmation of Mark Geraghty ("Geraghty Affirmation")¶¶ 32-37.)⁴Other times, the billboard companies would not bother with subterfuge and simply erected signs with no permitting at all.(SOF ¶ 9.)From 1980 until the late 1990s the City minimally enforced the arterial advertising restrictions.(Id.¶ 10.)

In 1998 the City amended the Zoning Resolution to clarify that non-commercial signs were permitted wherever any other types of signs were permitted.⁵The amendment was enacted in response to a New York State court decision in City of New York v. Allied Outdoor Advertising, Inc.,172 Misc.2d 707, 659...