Federation of Adver. Ind. Rep. v. City of Chicago

• Decision Date: 25 April 2003
• Docket Number: No. 02-1909.,02-1909.
• Parties: FEDERATION OF ADVERTISING INDUSTRY REPRESENTATIVES, INC., an Illinois not-for-profit corporation, Plaintiff-Appellant, v. CITY OF CHICAGO, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

326 F.3d 924

FEDERATION OF ADVERTISING INDUSTRY REPRESENTATIVES, INC., an Illinois not-for-profit corporation, Plaintiff-Appellant, v. CITY OF CHICAGO, Defendant-Appellee.

No. 02-1909.

United States Court of Appeals, Seventh Circuit.

Argued January 10, 2003.

Decided April 25, 2003.

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Paul M. Levy (argued), Deutsch, Levy & Engel, Chicago, IL, for Plaintiff-Appellant.

Mardell Nereim, Suzanne M. Loose (argued), Office of Corp. Counsel, Appeals Div., Chicago, IL, for Defendant-Appellee.

Daniel J. Popeo, Washington Legal Foundation, Washington, DC, for Amicus Curiae.

Before EASTERBROOK, MANION, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

This case concerns a continuing litigation involving a now-repealed Chicago city ordinance. The district court held that repeal of the ordinance ended the ongoing controversy and rendered the case moot. The district court also found that the plaintiff was not entitled to attorney's fees. For the reasons set out below, we affirm.

I. History

In September 1997, the Chicago City Council passed an ordinance prohibiting the placement of alcohol and cigarette advertisements in "publicly visible places," defined as outdoor billboards, sides of buildings, and freestanding signboards. The ordinance contained numerous exceptions allowing such advertisements in commercial zones, manufacturing zones, and other locations. Also included in the ordinance was a "grandfather" clause, which honored advertising contracts entered into before the effective date of the ordinance. The grandfather clause was removed, however, when the City learned that advertisers, relying on the clause, had entered into multiple new contracts and that these new contracts would essentially undermine the purpose of the ordinance.

Federation of Advertising Industry Representatives, Inc., an association of companies that displays advertisements for various products including cigarettes and alcohol, filed suit against the City, alleging that the ordinance violated the First Amendment and was preempted by both federal and state statutes.¹ In its complaint, Federation sought injunctive and declaratory relief, and made a claim for damages and attorney's fees.

In July 1998, Federation moved for summary judgment on its First Amendment and preemption claims. The district court granted the motion with respect to the preemption claim,² holding that the portions of the ordinance relating to cigarette advertising were preempted by § 5(b) of the Federal Cigarette Labeling and Advertising Act ("FCLAA"), 15 U.S.C. § 1334(b),³ and that the portions relating to alcohol advertising were not severable. Fed'n of Adver. Indus. Rep., Inc. v. City of Chicago, 12 F.Supp.2d 844, 853 (N.D.Ill. 1998). The district court awarded Federation declaratory and injunctive relief, but denied the claim for damages, stating that Federation had presented no evidence that it had suffered damages. Also, in a later order, the district court, pursuant to 42 U.S.C. § 1988, awarded Federation attorney's fees in excess of $400,000 and nontaxable expenses of nearly $15,000.

The City appealed the grant of summary judgment and the award of attorney's fees, but Federation did not appeal the district court's denial of its damages claim. In that first appeal, we reversed the district court's ruling that the FCLAA preempted all parts of the ordinance regulating cigarette advertising, finding instead that only a small exception in the ordinance allowing advertising of generic, as opposed to brand specific, tobacco products was preempted.⁴ Fed'n of Adver. Indus. Rep., Inc. v. City of Chicago, 189 F.3d 633, 639-40 (7th Cir. 1999). This preempted portion, we held, was severable from the balance of the statute; thus, we reversed the district court's decision that the ordinance was invalid in its entirety and affirmed that decision only as it related to the exception for generic tobacco advertising. Id. at 640. We remanded for further proceedings consistent with our opinion. Id.

On November 1, 2000, the City amended the ordinance to remove the preempted exception and to remove several other exceptions, the constitutionality of which had been called into question by the Supreme Court decision in Greater New Orleans Broad. Ass'n v. United States, 527 U.S. 173, 119 S.Ct. 1923, 144 L.Ed.2d 161 (1999). Subsequently, Federation amended its complaint to drop the preemption claim and to eliminate entirely its challenge to the cigarette-advertising portions of the ordinance.

On June 5, 2001, Federation moved for summary judgment on the First Amendment grounds, arguing that the ordinance's regulation of alcohol advertising was an invalid content-based regulation on noncommercial speech, and in the alternative, that the ordinance was an invalid restriction of commercial speech. Before the City filed a response, the Supreme Court decided Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 121 S.Ct. 2404, 150 L.Ed.2d 532 (2001), which held that a Massachusetts statute, similar to the statute in this case, was preempted by the FCLAA and violated the First Amendment. Id. at 551, 561, 121 S.Ct. 2404.

Federation filed a supplemental brief arguing that Lorillard required the district court to grant its motion for summary judgment. The City did not respond to the merits of Federation's summary judgment motion, but rather on September 13, 2001, filed a cross motion to dismiss based on mootness, citing the City's intention to repeal the ordinance in light of Lorillard and noting that since no damages claim remained, repeal would provide Federation full relief and end the controversy. The City did not concede the unconstitutionality of its ordinance, which it contended was materially different from the ordinance at issue in Lorillard; rather, it stated that the risks of going forward in light of Lorillard had persuaded it to repeal the ordinance. On October 31, 2001, the City Council repealed the ordinance, and a week later the district court granted the City's motion to dismiss, finding that the repeal of the ordinance had rendered the case moot.

Subsequently, Federation filed a motion for rehearing, on the grounds that it was a "prevailing party" and therefore entitled to reasonable attorney's fees under 42 U.S.C. § 1988. The district court denied the motion, reaffirming its decision on mootness and finding that Federation was not entitled to attorney's fees because it was not a "prevailing party" under the statute, as interpreted by the Supreme Court in Buckhannon Board & Care Home, Inc. v. W. Va. Dep't. of Health and Human Res., 532 U.S. 598, 600, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). Federation now appeals the district court's rulings on both mootness and attorney's fees.

II. Analysis

A. Mootness

Whether a case has been rendered moot is a question of law that we review de novo. Higgason v. Farley, 83 F.3d 807, 811 (7th Cir.1996). Under Article III of the Constitution, as interpreted by the courts, cases that do not involve "actual, ongoing controversies" are moot and must be dismissed for lack of jurisdiction. Stotts v. Cmty. Unit Sch. Dist. No. 1, 230 F.3d 989, 990-91 (7th Cir.2000). A question of mootness arises when, as here, a challenged ordinance is repealed during the pendency of litigation, and a plaintiff seeks only prospective relief. Rembert v. Sheahan, 62 F.3d 937, 940 (7th Cir.1995).

We begin with Federation's argument that this case is not moot because in addition to declaratory and injunctive relief, it sought damages in its complaint. We recognize that a defendant's change in conduct cannot render a case moot so long as the plaintiff makes a claim for damages. Buckhannon, 532 U.S. at 608-09, 121 S.Ct. 1835. However, no damage claim remains in this case. In the original district court ruling, which granted Federation's motion for summary judgment, the court explicitly denied Federation's claim for damages, holding that no evidence had been submitted to support the claim. See Federation, 12 F.Supp.2d at 854. This was a final ruling by the district court, which Federation did not appeal. "Under the doctrine of the law of the case, a ruling by the trial court, in an earlier stage of the case, that could have been but was not challenged on appeal is binding in subsequent stages of the case." Schering Corp. v. Ill. Antibiotics Co., 89 F.3d 357, 358 (7th Cir.1996). Thus, Federation is precluded from resurrecting its damages claim and at this stage may only seek injunctive and declaratory relief.

Federation next argues that this case presents a live controversy because, though the City has repealed the challenged ordinance, the City remains free to reenact it at any time. In support of this argument, Federation cites the general principle that a defendant's voluntarily cessation of challenged conduct will not render a case moot because the defendant remains "free to return to his old ways." United States v. W.T. Grant Co., 345 U.S. 629, 632-33, 73 S.Ct. 894, 97 L.Ed. 1303 (1953).

We do not dispute that this proposition is the appropriate standard for cases between private parties, but this is not the view we have taken toward acts of voluntary cessation by government officials. Rather, "[w]hen the defendants are public officials ... we place greater stock in their acts of self-correction, so long as they appear genuine." Magnuson v. City of Hickory Hills, 933 F.2d 562, 565 (7th Cir. 1991); see also Ragsdale v. Turnock, 841 F.2d 1358, 1365 (7th Cir.1988) ("We note additionally that cessation of the allegedly illegal conduct by government officials has been treated with more solicitude by the courts than similar action by private parties.") (citing 13A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3533.7, at 353 (2d ed.1984)). To adopt Federation's view that mere repeal is insufficient to moot a case would essentially put this court in the position of presuming that the City has acted in bad...