National Advertising Co. v. City and County of Denver

• Decision Date: 16 August 1990
• Docket Number: No. 88-1159,88-1159
• Citation: 912 F.2d 405
• Parties: NATIONAL ADVERTISING COMPANY, Plaintiff-Appellant, v. The CITY AND COUNTY OF DENVER, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 405

912 F.2d 405

NATIONAL ADVERTISING COMPANY, Plaintiff-Appellant, v. The CITY AND COUNTY OF DENVER, Defendant-Appellee.

No. 88-1159.

United States Court of Appeals Tenth Circuit.

Aug. 16, 1990.

Alan A. Armour, Attorney, Littleton, Colo. (Darrell L. Campbell, Denver, Colo., with him on the brief), for plaintiff-appellant.

Stan M. Sharoff, Asst. City Atty. (Stephen H. Kaplan, City Atty., with him on the brief), Denver, Colo., for defendant-appellee.

Before SEYMOUR and McWILLIAMS, Circuit Judges, and PHILLIPS, ^* District Judge.

SEYMOUR, Circuit Judge.

Plaintiff National Advertising Company (National), a seller of billboard advertising space, seeks a declaratory judgment, injunctive relief, and damages stemming from two ordinances enacted by defendant City and County of Denver (Denver) that restricted billboards along freeways. National claimed that it was entitled to relief for violations of the First Amendment, the Just Compensation Clause as incorporated into the Fourteenth Amendment, and the Fourteenth Amendment due process and equal protection clauses. In a grant of partial summary judgment and a bench trial, the district court rejected all of National's claims. We affirm.

I.

For many years, Denver had on its books Section 46-4 (the old ordinance) prohibiting advertising within 660 feet of the edge of the right-of-way of a freeway, "unless such signs advertise or pertain wholly to a business conducted on the premises." Rec., vol. I, doc. 5, exh. A at 2. Although the old ordinance permitted on-site signs with messages concerning the business conducted there, no similar exception existed for noncommercial messages. The old ordinance was still in effect when the Supreme Court in Metromedia, Inc. v. City of San Diego 453 U.S. 490, 101 S.Ct. 2882, 69 L.Ed.2d 800 (1981), ruled that a similar ordinance favoring commercial speech over noncommercial speech violates the First Amendment. Denver took no immediate action respecting the old ordinance, however.

Several years later, National's attorney began to talk with Denver officials about amending the old ordinance to cure the alleged constitutional defect and to allow off-site advertising along freeways. Presumably in expectation of such an amendment, in 1984 National began to lease space alongside freeways, useable solely for erecting and maintaining billboards. Ultimately, National entered into thirty-four such leases, with terms of up to ten years.

By July 1985, Denver was responding to various pressures for reform of the old ordinance. National sponsored and submitted proposed legislation to Denver on July 9, 1985. See Appellee's Exhibit Addendum to Answer Brief, Def.'s exh. C at 2. Anti-billboard forces also contemplated submitting their own proposal.

On July 17, 1985, Dorothy Nepa, Denver's Zoning Administrator, notified the various billboard companies operating in Denver, including National, of proposed legislation amending or replacing the old ordinance. In her letter she announced:

"Should this legislation be approved by City Council, applications for permits for such devices will be accepted in the Department of Zoning Administration on the effective date of the ordinance. Review and processing of these applications will commence after this date."

Id. Def.'s exh. B. At trial, the district court interpreted this letter as an implicit indication that new applications would not be accepted pending enactment of a new ordinance. See rec., vol. VII, at 7. The district court also found that, as of July 17, Denver had ceased enforcing the old ordinance. Shortly thereafter, on August 1, National submitted fifteen applications for billboard permits along freeways, all of which were simply returned.

By September 25 and 26, the efforts of the various pro- and anti-billboard forces resulted in the submission to City Council of two different bills repealing the old ordinance. National supported and lobbied for CB 560, which would have permitted off-site commercial billboards along freeways subject to certain spacing and other limitations. See Appellee's Exhibit Addendum, Pl.'s exh. 36. The anti-billboard groups in Denver supported CB 561, which would have continued the prohibition of off-site commercial billboards. See id. at Pl.'s exh. 37. At hearings before the City Council on October 28, at which National's counsel testified extensively, CB 560 passed by one vote and CB 561 failed by an equal margin.

On November 1, Denver's mayor vetoed CB 560. In his veto message, he supported the prompt repeal of the old ordinance and urged City Council to replace it with an ordinance preventing any increase in billboards. He also instructed the City Council sponsors of CB 561 to work with the City Attorney's office in drafting a suitable replacement. That same day National submitted thirty-four applications for off-site billboards along freeways. Other companies submitted approximately sixty more.

On November 12, National filed this lawsuit seeking an injunction, declaratory relief, and damages arising from the alleged enforcement of the old ordinance, which it claimed violated the First Amendment under Metromedia and the due process and equal protection clauses of the Fourteenth Amendment. National also sought just compensation for an alleged unconstitutional taking of its thirty-four leaseholds.

On November 14, two weeks after National submitted its applications, Denver denied all of them, stating:

"Reason for Denial: Within 660 ft. of [freeway] ... Pending legislation, if passed, will repeal Section 46-4 and enact restrictions on freeways which will require the denial of this application under zoning ordinances."

Id. at Pl.'s exh. 1. The district court found that the city attorney's office and at least two city council members were actively pursuing a follow-up to the narrowly-defeated CB 561 in the time period between the veto of CB 560 and submission of the applications, on November 1, and their denial on November 14. The court also found that a proposed replacement ordinance identical to CB 561 was filed in City Council on November 14. Finally, the district court concluded that National was aware of the status of CB 561 and its successor during this period through the involvement of its counsel, Gil Goldstein.

On November 22, notice was given that a public hearing on the proposed replacement ordinance, CB 712, was set for December 16. Both traffic safety and aesthetic justifications were debated at the hearing, and CB 712 (the new ordinance), ¹ was enacted. In addition to repealing the old ordinance, the new ordinance bans all off-site commercial signs within 660 feet of a freeway. Within this area, on-site commercial signs under a certain size and noncommercial signs are permitted. Both parties agree that application of the new ordinance requires that a distinction be made between off-site noncommercial signs and off-site commercial signs. To aid in this distinction, the new ordinance defined an "off-site commercial sign" as follows:

"A sign which directs attention to a business, commodity, service, entertainment or attraction sold, offered or existing elsewhere than upon the same zone lot where such sign is displayed. This definition does not include noncommercial signs."

Id. at Pl.'s exh. 38.

When the new ordinance passed, National amended its complaint to add claims for declaratory and injunctive relief, as well as for damages under 42 U.S.C. Sec. 1983 (1982) based on the new ordinance's alleged facial unconstitutionality. National premised its new claims not only on the First Amendment, but also on the due process and equal protection clauses of the Fourteenth Amendment, and the proscription against taking property without just compensation. National retained the claims concerning the now-repealed old ordinance.

On summary judgment, the district court held the new ordinance facially constitutional and concluded that National's requests for declaratory and injunctive relief arising from the unconstitutionality of the old ordinance were mooted by its repeal. After a bench trial on the section 1983 claim for damages and the inverse condemnation claim involving the old ordinance, the district court ruled for Denver. In its oral findings of fact and conclusions of law, the district court held that the "pending ordinance doctrine" foreclosed these claims. National has appealed all of the district court's rulings.

II.

In reviewing the district court's grant of summary judgment, we apply the same standard as the court below, see Fed.R.Civ.P. 56(c), and examine the district court's conclusions de novo. See United Food & Commercial Workers Int'l Union v. Gold Star Sausage Co., 897 F.2d 1022, 1024 (10th Cir.1990). We review a district court's findings of fact at trial under the clearly erroneous standard, under which we will uphold a fact-finding unless we are " 'left with a definite and firm conviction that a mistake has been committed.' " Everaard v. Hartford Accident & Indem. Co., 842 F.2d 1186, 1191 (10th Cir.1988) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 541-42, 92 L.Ed. 746 (1948)). The district court's conclusions of law are reviewed de novo. See In re Ruti-Sweetwater, Inc., 836 F.2d 1263, 1266 (10th Cir.1988).

III.

A. Constitutionality of the New Ordinance

Denver's new ordinance prohibits off-site commercial signs within 660 feet of a freeway. On-site commercial and noncommercial signs are permitted. National first argues that this partial ban illegally regulates commercial speech.

Commercial speech receives less First Amendment protection than other constitutionally safeguarded expression. See Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557, 563, 100 S.Ct. 2343, 2350, 65 L.Ed.2d 341 (1980). To determine whether regulation of commercial speech is consistent with the First Amendment, the Court in Central Hudson has provided a four-part inquiry: (1) the speech must concern...