Or. Natural Res. Council Fund v. Port Portland

• Decision Date: 28 June 2017
• Docket Number: A156024
• Parties: OREGON NATURAL RESOURCES COUNCIL FUND, dba Oregon Wild, Plaintiff-Respondent, Cross-Appellant, v. PORT OF PORTLAND, Defendant-Appellant, Cross-Respondent.
• Court: Oregon Court of Appeals

286 Or.App. 447

398 P.3d 923

OREGON NATURAL RESOURCES COUNCIL FUND, dba Oregon Wild, Plaintiff-Respondent, Cross-Appellant,

v.PORT OF PORTLAND, Defendant-Appellant, Cross-Respondent.

A156024

Court of Appeals of Oregon, En Banc.

Argued and submitted October 6, 2015

resubmitted en banc May 17, 2017.

June 28, 2017

Matthew J. Kalmanson, Portland, argued the cause for appellant-cross-respondent. With him on the briefs were Karen O'Kasey and Hart Wagner LLP.

Thomas M. Christ, Portland, argued the cause and filed the briefs for respondent-cross-appellant.

Before Hadlock, Chief Judge, and Armstrong, Ortega, Sercombe, Duncan, Egan, DeVore, Tookey, Garrett, DeHoog, and Shorr, Judges, and Flynn, J. pro tempore.

DUNCAN, J.

Defendant Port of Portland (the Port) appeals a judgment declaring that the Port violated Article I, section 8, of the Oregon Constitution when it rejected a proposed advertisement that plaintiff Oregon Natural Resources Council (Oregon Wild) wanted to run at Portland International Airport (PDX). The circuit court reasoned that the Port's advertising policy impermissibly restricts the content of speech by prohibiting political but not commercial advertisements—a ruling based largely on our decision in Karuk Tribe of California v. TriMet , 241 Or.App. 537, 251 P.3d 773 (2011), aff'd by an equally divided court , 355 Or. 239, 323 P.3d 947 (2014), in which we held that TriMet had violated Article I, section 8, when it similarly restricted advertisements on the side of public busses. On appeal, the Port argues that this case is distinguishable legally and factually from Karuk Tribe because (1) the Port's advertising policy is not a "law" for purposes of Article I, section 8 (an argument that Karuk Tribe did not address); (2) even if the policy is a law, it does not regulate speech based on content but rather based on concerns inherent in managing an international commercial airport, which are very different from concerns about the outside of busses; and (3) even if the policy is a law that regulates speech based on content, the restrictions nonetheless fall within a well established historical exception for municipal corporations acting in a proprietary rather than governmental capacity.

Oregon Wild responds that this case is moot, because its advertisement has run and it has no present plans to run it again. As for the merits, Oregon Wild argues that we should follow Karuk Tribe , reject any arguments that are not directly controlled by that case, and affirm the circuit court's declaratory judgment.

As discussed more fully below, we are not persuaded that the case is moot, and we therefore proceed to the merits of the Port's appeal. On the merits, we agree with Oregon Wild that the Port's arguments do not yield a different result from Karuk Tribe and, adhering to our reasoning in that case, affirm the circuit court's declaratory judgment.¹

I. BACKGROUND

The relevant factual background for this appeal is not in dispute. The Port is a port district and municipal corporation created in 1891. See generally Cook v. The Port of Portland , 20 Or. 580, 27 P. 263 (1891) (describing the creation of the Port). The Port's purpose is to promote its maritime, shipping, aviation, commercial, and industrial interests, and it is authorized to acquire and convey property, contract with third parties, and generally "do any other acts and things which are requisite, necessary or convenient in accomplishing the purpose described or in carrying out" that purpose. ORS 778.015. The Port owns and operates PDX.

In 2008, the Port adopted Ordinance No. 423-R, which regulates the operation of PDX. Section 1.1.8 of the ordinance states that the Port finds that "[e]stablishing reasonable Regulations at its Airports limiting commercial and noncommercial activity within the Airport are essential." To that end, section 4.1.1 delegates authority to the Port's director to "adopt Rules governing the operation of Airport facilities for each Port airport."

In accordance with section 4.1.1, the Port adopted the "Portland International Airport Rules." Chapter 13 of those rules concerns "Advertising, Promotion and Signage." Under that chapter, private parties are permitted to lease advertising space at the airport, but there are restrictions on the content of the advertisements. Most significantly, for purposes of this case, the Port "does not permit the placement of advertising materials at the Airport that contain * * * religious or political messages."²

In 2013, Oregon Wild submitted a request to lease advertising space at PDX. The proposed advertisement contained a photograph of a tree-covered mountaintop, part of which had been clear cut. The caption read, "Welcome to Oregon[—]Home of the Clearcut." (Uppercase altered.) The advertisement also included a website address, www.ClearCutOregon.com.

The Port denied Oregon Wild's request, deeming the advertisement to be "political advertising." The Port invited Oregon Wild to apply instead for a permit for free speech activities, which the Port allowed in certain areas of PDX.³ Oregon Wild declined that invitation and filed this action for writ of review and declaratory relief, alleging, among other things, that the Port's rejection of the advertisement, based on its content, violated the free-speech guarantees in Article I, section 8, of the Oregon Constitution and the First Amendment to the United States Constitution.

Following the return of the writ and the record, the parties filed cross-motions for summary judgment. The cross-motions addressed the import of our decision in Karuk Tribe , review of which was pending at that time in the Supreme Court. Because that decision frames the parties' arguments below and on appeal, we pause to summarize it.

In Karuk Tribe , the question before us was whether TriMet, a mass transit district, had violated Article I, section 8, by rejecting the petitioners' proposed advertisement based on a policy that allowed commercial but not political advertisements on the sides of its vehicles. TriMet defended its advertising policy on two grounds, both of which related to TriMet's proprietary functions as a municipal corporation.⁴ First, TriMet argued that the framework set out in State v. Robertson , 293 Or. 402, 649 P.2d 569 (1982), for evaluating Article I, section 8, claims—a framework in which regulations based on the content of expression are impermissible unless wholly confined to a historical exception—should not apply to TriMet's policy because it was acting in its proprietary rather than regulatory capacity as a transit district. That is, notwithstanding Robertson , TriMet urged the court to construe Article I, section 8, to "allow government-drawn distinctions based on the content of expression where the government acts in its proprietary capacity." Karuk Tribe , 241 Or.App. at 546, 251 P.3d 773.⁵ Second, in its reply brief, TriMet advanced the alternative argument that, even if the Robertson framework were to apply, a similar "government as proprietor" distinction puts TriMet's advertising policy restrictions within a well-established historical exception to the reach of Article I, section 8. Karuk Tribe , 241 Or.App. at 548, 251 P.3d 773.

We rejected both of those "government as proprietor" arguments. The first we rejected on the merits, concluding that "TriMet's arguments before us that this is not a Robertson case are unpersuasive." Karuk Tribe , 241 Or.App. at 547, 251 P.3d 773. The second, however, we concluded had been raised too late in the litigation. We explained that "[w]e do not reach the merits of that [historical exception] argument for two reasons: not only did TriMet fail to preserve that argument below, but, as we have often had occasion to remind others, a party may not raise an issue for the first time in a reply brief." Id. at 548, 251 P.3d 773 (internal quotation marks, alterations, and citations omitted).

In the process of rejecting those arguments, we also identified but did not address yet another possible "government as proprietor" issue under Article I, section 8—that is, whether TriMet's advertising policy was even a "law" for purposes of that constitutional provision. We noted:

"TriMet does not contend that an advertising policy adopted by a governmental officer that only affects contractual relationships of that government does not enact or implement a 'law' under Article I, section 8. Indeed, TriMet eschewed any such contention at oral argument. * * *. Neither we nor the Supreme Court have decided whether a governmental policy adopted by an executive officer that only affects contractual relationships of that government, and does not enact or implement a general rule of civil conduct, qualifies as a 'law,' whose enactment or enforcement is constrained by Article I, section 8. It may be that the relevant 'law' here is ORS 267.140(2), empowering the general manager to adopt the policy in question. As we have said, however, any legal distinction about the meaning of a 'restricting' or 'restraining' 'law' under Article I, section 8—although related to TriMet's 'government as proprietor' thesis—is outside the legal questions presented to the reviewing court below and advanced on appeal."

Karuk Tribe , 241 Or.App. at 547 n. 7, 251 P.3d 773.

In October 2011, the Supreme Court allowed review of our decision, and it remained pending in that court at the time that Oregon Wild and the Port filed their summary judgment motions in this case in 2013. In its motion, Oregon Wild argued that this case was "nearly identical" to Karuk Tribe : "The issue in both cases is whether the government can regulate the content of advertising on government-owned property that has been opened to the public for that purpose." Oregon Wild urged the circuit court to simply follow that decision—at least until the Supreme Court said otherwise.

The Port, in its cross-motion, argued that Karuk Tribe resolved only one of the grounds upon which the Port defended its advertising policy....