Napa Valley Publishing Co. v. City of Calistoga

• Decision Date: 06 September 2002
• Docket Number: No. C-02-3176 EMC.,C-02-3176 EMC.
• Citation: 225 F.Supp.2d 1176
• Parties: NAPA VALLEY PUBLISHING COMPANY, Plaintiff, v. CITY OF CALISTOGA, Defendant.
• Court: U.S. District Court — Northern District of California

225 F.Supp.2d 1176

NAPA VALLEY PUBLISHING COMPANY, Plaintiff, v. CITY OF CALISTOGA, Defendant.

No. C-02-3176 EMC.

United States District Court, N.D. California.

September 6, 2002.

COPYRIGHT MATERIAL OMITTED

Roger R. Myers, Lisa Sitkin, Gregory K. Jung, Steinhart & Falconer, San Francisco, CA, for Plaintiff.

Michelle Marchetta Kenyon, Kevin D. Siegel, McDonough, Holland & Allen, Oakland, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART NAPA VALLEY PUBLISHING COMPANY'S MOTION FOR A PRELIMINARY INJUNCTION (No. 11)

CHEN, United States Magistrate Judge.

Napa Valley Publishing Company (hereinafter "NVP"), a corporation of the state of Washington, publishes and distributes newspapers and periodicals in Napa County, California. More specifically, NVP publishes and distributes, inter alia, The Napa Valley Register, a daily newspaper sold to local citizens for its news coverage, Inside Napa Valley, a free publication distributed primarily to visitors for its map and coverage of local businesses and events, and Distinctive Properties, a free guide featuring real property for sale in the area. NVP has distributed these publications in newsracks along the public walkways of the City of Calistoga for a number of years. In 2000, NVP distributed its publications in twenty-two separate newsracks.

The City of Calistoga (hereinafter the "City") is a historic town in the Napa Valley known for its tourism. The City is home to a number of day spas, visitor accommodations, restaurants and retail shops, etc. On February 6, 2001, the City, due in part to the growing sentiment of the City's merchants and citizens who felt that the newsracks affected the aesthetics and pedestrian safety of the City, in 2001, enacted Ordinance No. 570, codified as § 12.34 of the City's Municipal Code (hereinafter the "Ordinance"), regulating newsracks. The City adopted the Ordinance "to promote the public health, safety and welfare through the regulation of placement, appearance, number, size and servicing of newsracks on the public rights-of-way." Calistoga Muni.Code § 12.34.050(A).

The Ordinance limits the maximum number of newsracks which may be located on a city block to eight. In three locations, the Ordinance provides an exception to this rule, allowing up to twelve, and in one location up to sixteen. Where there are two or more newsracks in any one location, the newsracks must be housed in a pedestal-mounted modular newsrack. A modular or cluster newsrack is one with two rows of compartments into which individual newsracks can be installed. Each module can accommodate from four to eight newsracks. The Ordinance also requires that newsracks, including modular newsracks, cannot be placed within two hundred feet of one another on the same city block.

Additionally, the Ordinance requires publishers to obtain encroachment and newsrack permits prior to the installation of any newsrack. And where the City receives more permit applications than permitted at a particular location, the Ordinance provides for the City to conduct a random lottery to allot the available newsrack spaces within the pedestal-mounted newsrack.

In March 2001, no lottery was held because the publishing companies who had previously distributed their publication in the City prior to the Ordinance's enactment were able to divide the available newsracks amongst themselves.

Sometime after the initial installation of the pedestal-mounted newsracks in 2001 and April 17, 2002, other publications applied for newsrack permits under the Ordinance at locations that had already reached the applicable newsrack limit. Because demand exceeded supply, the City conducted its first newsrack lottery in 2002.¹

As a result of the lottery conducted on April 17, 2002, NVP lost the right to distribute its publications at five of its eighteen newsracks.²

On June 4, 2002, NVP appealed the results of the April 17, 2002 lottery to the Calistoga City Council. NVP's appeal was denied. On June 17, 2002, the City notified NVP that it was required to remove its publications from the five newsracks within fifteen days.

On July 2, 2002, NVP filed a complaint against the City alleging violations of NVP's: [1] First and Fourteenth Amendment rights; [2] Due Process rights; [3] rights under the Equal Protection Clause; and [4] rights under the California Constitution.³

Thereafter, on July 17, 2002, the City notified NVP for a second time that it was required to remove its publications.

NVP appealed the City's notice of removal to the Calistoga City Council. On July 31, 2002, the City denied NVP's administrative appeal and ordered NVP to remove its publications within ten days (on or before August 10, 2002).

On August 8, 2002, NVP filed a motion for a temporary restraining order and preliminary injunction before the Court asserting as it primary basis NVP's First Amendment Claim. On August 9, 2002, due to this Court's unavailability, a hearing on the motion for temporary restraining order was held before the Honorable Charles R. Breyer. The District Court issued the temporary restraining order maintaining the status quo.

Additional briefs and evidentiary material were submitted by both parties and a hearing on the motion for a preliminary injunction was held on August 21, 2002, and taken under submission.

Having reviewed the briefs and accompanying evidentiary submissions filed by counsel and the record in this case, as well as having considered the oral argument of counsel on August 21, 2002, the Court makes the following determinations.

ANALYSIS

A. Legal Standard

A preliminary injunction is a provisional remedy, the purpose of which is to preserve status quo and to prevent irreparable loss of rights prior to final disposition of the litigation. Sierra On Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir.1984). The trial court may grant a temporary restraining order or preliminary injunction in the exercise of its equitable powers. Fed R. Civ. P. 65. It does so in the exercise of its discretion. See Schneider v. California Department of Corrections, 91 F.Supp.2d 1316, 1327 (N.D.Cal.2000), citing, Big Country Foods, Inc. v. Board of Educ. of Anchorage School Dist., 868 F.2d 1085, 1087 (9th Cir. 1989). Generally, to obtain preliminary injunctive relief, a moving party must show a threat of irreparable injury and the inadequacy of legal remedies, the conventional requisites for equitable relief. See Arcamuzi v. Continental Air Lines, Inc., 819 F.2d 935, 937 (9th Cir.1987); Easyriders Freedom F.I.G.H.T. v. Hannigan, 92 F.3d 1486, 1495 (9th Cir.1996).

In addition, the issuance of preliminary injunctive relief rests upon consideration of four factors: [1] the likelihood of the plaintiffs' success on the merits; [2] the threat of irreparable harm to the plaintiffs if the injunction is not imposed; [3] the relative balance of this harm to the plaintiffs and the harm to the defendants if the injunction is imposed; and [4] the public interest. Los Angeles Memorial Coliseum Commission v. National Football League, 634 F.2d 1197, 1200-01 (9th Cir. 1980).

The Ninth Circuit has encompassed these factors into a two-prong test. To qualify for preliminary injunctive relief, the moving party must show "`either [1] a likelihood of success on the merits and the possibility of irreparable injury, or [2] that serious questions going to the merits were raised and the balance of hardships tips sharply in [the moving party's] favor.'" Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1119 (9th Cir.1999), quoting, Sega Enterprises, Ltd. v. Accolade, Inc., 977 F.2d 1510, 1517 (9th Cir. 1992). See Schneider, 91 F.Supp.2d at 1327. "These two formulations represent a continuum in which the required degree of irreparable harm increases as the probability of success decreases." America West Airlines, Inc. v. National Mediation Board, 119 F.3d 772, 777 (9th Cir.1997) (internal quotations omitted). See Sun Microsystems, 188 F.3d at 1119 (noting that the greater the moving party's relative hardship, the less probability of success must be shown); Schneider, 91 F.Supp.2d at 1327 ("These are not two distinct tests, but rather the opposite ends of a single continuum in which the required showing of harm varies inversely with the required showing of meritoriousness." (internal quotations omitted)). When an injunction would affect the public, the court must examine whether the public interest would be advanced or impaired by the issuance of a preliminary injunction. Caribbean Marine Services Co. v. Baldrige, 844 F.2d 668, 674 (9th Cir.1988).

1. Irreparable injury

The City initially argues that NVP cannot establish irreparable injury, if it is unable to show a likelihood of success on the merits. The City argues that if there is only a showing of serious questions on the merits, the threat to First Amendment rights is insufficient to permit injunctive relief.

The argument is meritless. It collapses two concepts. Inquiry into irreparable injury is separate and distinct from inquiry into the merits. The issue with respect to irreparable injury is whether, if the preliminary injunction is denied, the plaintiff can be made whole should it prove victorious at trial, i.e., whether the loss or deprivation pending trial is reparable. The loss of money is the classic example of an interim loss that is fully remediable after trial. L.A. Coliseum, 634 F.2d at 1202 (irreparable harm not present where losses can be compensated by money damages). On the other hand, certain interim injuries such as an injury to the environment or to a copyright, become irretrievable once incurred and are not fully remediable. See, e.g., Amoco Production Co. v. Village of Gambell, 480 U.S. 531, 545, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987) (environmental injury); Cadence Design Systems, Inc. v. Avant! Corp., 125 F.3d 824, 827 (9th Cir.1997) (presumption of irreparable harm in copyright infringement cases), cert. denied, 523...