Clear Channel Outdoor, Inc. v. Mayor & City Council of Balt.

• Decision Date: 28 December 2015
• Docket Number: Civil Action No. GLR-13-2379
• Parties: Clear Channel Outdoor, Inc., Plaintiff, v. Mayor and City Council of Baltimore, Defendant.
• Court: U.S. District Court — District of Maryland

153 F.Supp.3d 865

Clear Channel Outdoor, Inc., Plaintiff,

v.Mayor and City Council of Baltimore, Defendant.

Civil Action No. GLR-13-2379

United States District Court, D. Maryland.

Signed December 28, 2015

Benjamin Rosenberg, Elizabeth Moody Shaner, Rosenberg Martin Greenberg LLP, Baltimore, MD, Danielle J. Carter, Gordon D. Todd, Joseph R. Guerra, Sidley Austin LLP, Washington, DC, for Plaintiff.

Steven John Potter, Baltimore City Department of Law, Baltimore, MD, for Defendant.

MEMORANDUM OPINION

George L. Russell, III, United States District Judge

THIS MATTER is before the Court on Plaintiff's, Clear Channel Outdoor, Inc. (“Clear Channel”), Motion for Summary Judgment and Defendant's, Mayor and City Council of Baltimore (the “City”), Cross-Motion for Summary Judgment. (ECF Nos. 37, 38). Principally at issue is whether Baltimore City Ordinance 13-139 (the “Billboard Ordinance”), which levies select outdoor advertising displays in the city, constitutes a tax under the Tax Injunction Act (“TIA”), 28 U.S.C. § 1341 (2012)

.

The Court, having reviewed the Motions and supporting documents, finds no hearing necessary. See Local Rule 105.6 (D.Md. 2014). For the reasons outlined below, the Court will deny Clear Channel's Motion for Summary Judgment and grant the City's Cross-Motion for Summary Judgment.

I. BACKGROUND¹

The Billboard Ordinance became law in June 2013. See Balt., Md., Ordinance 13-139 (Jun. 17, 2013) (codified as amended at Balt., Md., Code art. 28, §§ 29 et seq. (2014)). The Baltimore City Council enacted it for “the purpose of imposing a tax on the privilege of exhibiting outdoor advertising displays in the City.” Id . at 1:2–3. Clear Channel owns and operates approximately ninety-five percent of the advertising displays subject to the Billboard Ordinance. It alleges the Billboard Ordinance will cost it $1.5 million annually.

On August 14, 2013, Clear Channel filed a Complaint alleging the Billboard Ordinance impermissibly regulates commercial speech in violation of the First and Fourteenth Amendments to the United States Constitution. (ECF No. 1). Clear Channel seeks a declaratory judgment that the Billboard Ordinance is unconstitutional and an order enjoining the City from enforcing it. The City moved to dismiss the action on September 19, 2013, arguing this Court did not have subject-matter jurisdiction because the Billboard Ordinance is a “tax” under the TIA. (ECF No. 15). The Court denied the City's Motion to Dismiss on May 19, 2014, explaining that “at least at th[at] stage of the litigation, the ordinance [was] a fee, not a tax, for the purposes of the TIA.” (Mem. Op. at 2, ECF No. 21). The City filed a Motion for Reconsideration (ECF No. 23), which the Court denied on August 19, 2014 (ECF No. 26).

Clear Channel filed a Motion for Summary Judgment on April 3, 2015. (ECF No. 37). The City responded by filing an Opposition to the Motion for Summary Judgment and Cross-Motion for Summary Judgment on April 20, 2015. (ECF No. 38). Clear Channel then submitted an Opposition to the City's Motion for Summary Judgment and Reply supporting its Motion for Summary Judgment on May 7, 2015. (ECF No. 39). Finally, the City submitted a Reply to Clear Channel's Opposition on May 26, 2015. (ECF No. 40).

II. DISCUSSION

A. Standard of Review

Under Federal Rule of Civil Procedure 56

, the Court must grant summary judgment if the moving party demonstrates there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citing Adickes v. S.H. Kress & Co. , 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ).

Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)

. Rule 56(c) requires the nonmoving party to go beyond the pleadings and by its own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial. Celotex Corp. v. Catrett , 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The nonmoving party “cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.” Beale v. Hardy , 769 F.2d 213, 214 (4th Cir.1985) (citing Barwick v. Celotex Corp. , 736 F.2d 946, 963 (4th Cir.1984) ).

“[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson , 477 U.S. at 247–48, 106 S.Ct. 2505

. A “material fact” is one that might affect the outcome of a party's case. Id . at 248, 106 S.Ct. 2505 ; see also JKC Holding Co. v. Wash. Sports Ventures, Inc. , 264 F.3d 459, 465 (4th Cir.2001) (citing Hooven–Lewis v. Caldera , 249 F.3d 259, 265 (4th Cir.2001) ). Whether a fact is considered to be “material” is determined by the substantive law, and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson , 477 U.S. at 248, 106 S.Ct. 2505 ; accord Hooven–Lewis , 249 F.3d at 265. A “genuine” issue concerning a “material” fact arises when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. Anderson , 477 U.S. at 248, 106 S.Ct. 2505.

When the parties have filed cross-motions for summary judgment, the court must “review each motion separately on its own merits to ‘determine whether either of the parties deserves judgment as a matter of law.’ ” Rossignol v. Voorhaar , 316 F.3d 516, 523 (4th Cir.2003)

(quoting Philip Morris Inc. v. Harshbarger , 122 F.3d 58, 62 n. 4 (1st Cir.1997) ). Moreover, “[w]hen considering each individual motion, the court must take care to ‘resolve all factual disputes and any competing, rational inferences in the light most favorable’ to the party opposing that motion.” Id. (quoting Wightman v. Springfield Terminal Ry. Co. , 100 F.3d 228, 230 (1st Cir.1996)

). This Court, however, must also abide by its affirmative obligation to prevent factually unsupported claims and defenses from going to trial. Drewitt v. Pratt , 999 F.2d 774, 778–79 (4th Cir.1993). If the evidence presented by the nonmoving party is merely colorable, or is not significantly probative, summary judgment must be granted. Anderson , 477 U.S. at 249–50, 106 S.Ct. 2505.

B. Analysis

The Court will deny Clear Channel's Motion for Summary Judgment and grant the City's Cross-Motion for Summary Judgment because the Billboard Ordinance is a “tax” under the TIA.

“The TIA ‘is a jurisdictional bar not subject to waiver.’ ” Brittingham 62, LLC v. Somerset Cty. Sanitary Dist., Inc. , No. GLR 12–3104, 2013 WL 398098, at *3 (D.Md. Jan. 31, 2013)

(quoting Antosh v. City of Coll. Park , 341 F.Supp.2d 565, 568 (D.Md.2004) ). It provides that federal courts lack subject-matter jurisdiction to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” 28 U.S.C. § 1341. It “applies to actions where, as here, a taxpayer seeks injunctive or declaratory relief under § 1983.” Folio v. City of Clarksburg, W.Va. , 134 F.3d 1211, 1214 (4th Cir.1998).

When considering whether the TIA bars a federal challenge to a charge imposed by a state or local government, a district court must resolve two issues: (1) whether a plain, speedy, and efficient remedy exists in state court; and (2) whether the charge is a tax or a fee. Collins Holding Corp. v. Jasper Cty., S.C. , 123 F.3d 797, 799 (4th Cir.1997)

. Clear Channel does not argue that Maryland state courts do not provide a speedy and efficient remedy. Thus, the sole issue before the Court is whether the Billboard Ordinance is a tax or a fee under the TIA.

“The nebulous line between tax and fee is determined by federal law.” Brittingham , 2013 WL 398098, at *3

(citing Folio , 134 F.3d at 1217 ). As a general matter, when evaluating whether a particular charge is a tax or a fee, a court should assess “whether the charge is for revenue raising purposes, making it a ‘tax,’ or for regulatory or punitive purposes, making it a ‘fee.’ ” Valero Terrestrial Corp. v. Caffrey , 205 F.3d 130, 134 (4th Cir.2000). All charges fall on a spectrum with a “classic tax” on one end and a “classic fee” on the other. San Juan Cellular Tel. Co. v. Pub. Serv. Comm'n of P.R. , 967 F.2d 683, 685 (1st Cir.1992). “The ‘classic tax’ is imposed by the legislature upon a large segment of society, and is spent to benefit the community at large.” Valero , 205 F.3d at 134 (citing San Juan Cellular , 967 F.2d at 685 ). “The ‘classic fee’ is imposed by an administrative agency upon only those persons, or entities, subject to its regulation for regulatory purposes, or to raise ‘money placed in a special fund to defray the agency's regulation-related expenses.’ ” Id. (quoting San Juan Cellular , 967 F.2d at 685 ).

To aid a court's assessment of where a charge falls on the spectrum, the United States Court of Appeals for the Fourth Circuit has developed a three-prong inquiry: “(1) what entity imposes the charge; (2) what population is subject to the charge; and (3) what purposes are served by the use of the monies obtained by the charge.” Id.

(emphasis added). This inquiry often yields an ambiguous result, as the characteristics of a charge will often place it somewhere between a classic fee and a classic tax. Id.

The result of the three-prong inquiry is ambiguous when, for example, a legislature imposes the charge,...