Outdoor Systems, Inc. v. City of Mesa, Nos. 88-15804

• Decision Date: 30 June 1993
• Docket Number: Nos. 88-15804,88-15838,90-15208,89-15568
• Citation: 997 F.2d 604
• Parties: OUTDOOR SYSTEMS, INC., an Arizona corporation; Milton Lee, Trustee for the Danny O. Lee Trust, Plaintiffs-Appellees, v. CITY OF MESA, an Arizona municipal corporation, Defendant-Appellant. OUTDOOR SYSTEMS, INC., an Arizona corporation; Milton Lee, Trustee for the Danny O. Lee Trust, Plaintiffs-Appellants, v. CITY OF MESA, an Arizona municipal corporation, Defendant-Appellee. WHITECO METROCOM, INC., an Indiana corporation, Plaintiff-Appellant, v. CITY OF TUCSON, an Arizona municipal corporation, Defendant-Appellee. WHITECO METROCOM, INC., an Indiana corporation, Plaintiff-Appellant, v. CITY OF TUCSON, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 604

997 F.2d 604

62 USLW 2037

OUTDOOR SYSTEMS, INC., an Arizona corporation; Milton Lee, Trustee for the Danny O. Lee Trust, Plaintiffs-Appellees, v. CITY OF MESA, an Arizona municipal corporation, Defendant-Appellant.

OUTDOOR SYSTEMS, INC., an Arizona corporation; Milton Lee, Trustee for the Danny O. Lee Trust, Plaintiffs-Appellants, v. CITY OF MESA, an Arizona municipal corporation, Defendant-Appellee.

WHITECO METROCOM, INC., an Indiana corporation, Plaintiff-Appellant, v. CITY OF TUCSON, an Arizona municipal corporation,

Defendant-Appellee.

WHITECO METROCOM, INC., an Indiana corporation, Plaintiff-Appellant, v. CITY OF TUCSON, Defendant-Appellee.

Nos. 88-15804, 88-15838, 89-15568, 90-15208.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 9, 1990.

Submission Withdrawn May 21, 1990.

Reargued and Submitted Dec. 9, 1992.

Decided June 30, 1993.

J. LaMar Shelley, Shelley & Bethea, Mesa, AZ, for defendants-appellants/cross-appellees.

Martin A. Aronson, Beus, Gilbert & Morrill, Phoenix, AZ, for plaintiffs-appellees/cross-appellants.

John N. Iurino, Lewis and Roca, Tucson, AZ, for plaintiff-appellant.

Bradford C. Detrick, Deputy City Atty., and John Gabroy, Gabroy, Rollman & Bossi; P.C., Tucson, AZ, for defendant-appellee.

Appeals from the United States District Court for the District of Arizona.

Before: WALLACE, Chief Judge, ALARCON and LEAVY, Circuit Judges.

WALLACE, Chief Judge:

The continuing efforts of cities to eradicate what they perceive to be a visual blight and safety hazard has resulted in billboard litigation raising complicated constitutional and statutory claims. This case is no exception. Hoping to obviate the need for constitutional adjudication, we certified a question to the Supreme Court of Arizona, which accepted the task of determining whether the sign codes before us violate relevant Arizona statutes. The Arizona Supreme Court held they do not, see Outdoor Systems, Inc. v. City of Mesa, 169 Ariz. 301, 819 P.2d 44 (Ariz.1991) (Outdoor Systems), and we therefore return to our constitutional adjudication.

This case came to us in a not surprising fashion. Outdoor Systems, Inc. (Outdoor Systems), and Whiteco Metrocom, Inc. (Whiteco), lessors of advertising space on billboards, respectively challenge the validity of sign codes enacted by the cities of Mesa and Tucson, Arizona. We must determine in these consolidated appeals whether these codes contravene the guarantees of free speech and the protections of property from confiscation without compensation embodied in the United States and Arizona Constitutions. The district judge in the Outdoor Systems litigation, Nos. 88-15804 and 88-15838, while denying Outdoor Systems's other claims, held that Mesa's sign code effected an unconstitutional taking. A different district judge in the Whiteco litigation, No. 89-15568, held that Tucson's sign code was valid in all respects.

The district court had jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1343(a)(3), and pendent jurisdiction over the state law claims. We have jurisdiction over these timely appeals pursuant to 28 U.S.C. § 1291. We affirm in part and reverse in part in the Outdoor Systems litigation, and we affirm in the Whiteco litigation. In a separate appeal, No. 90-15208, which we consolidate for purposes of decision, we affirm the district court's limited award of attorneys' fees to Whiteco.

I

Although this litigation arose in the Arizona district court, it involves separate cases, separate cities, and separate judgments.

A.

Whiteco is an Indiana corporation which leases small areas of land in the City of Tucson from property owners, constructs billboards on them, and leases advertising space. The messages on Whiteco's billboards include commercial advertising, noncommercial (including political) advertising, and public service messages.

In 1985, Tucson enacted a sign code regulating the size, location, and height of signs. The code classifies signs as either "onsite" or "offsite." As the names suggest, an onsite sign is defined as one "located on the same premises as the use that sign identifies or advertises." Tucson City Code § 3-15(u) (as amended 1987). An offsite sign is one not located on the same premises as the use advertised or identified by the sign. All billboards are considered offsite signs. Onsite signs are limited in size and number according to the location of the property on which they are located. Offsite signs are permitted only in certain designated parts of the City (primarily industrial or commercial areas) and are prohibited within certain zoning classifications. Even within the areas open to offsite signs, the code restricts the size, location, and density of these signs.

The sign code originally did not specifically protect noncommercial speech. In 1987, however, the City amended the code to include a "substitution provision," which provides, "Any sign authorized in this chapter is allowed to contain noncommercial copy in lieu of any other copy." Tucson City Code § 3-2. The code also requires a permit from the City before a sign can be erected and before the message on an existing sign can be changed. Although the code does not prescribe any time limit for the review of permit applications, it states that "a permit shall be issued to the applicant" if the proposed sign conforms to the requirements of the code and any other relevant laws and ordinances. Tucson City Code § 3-22(a)(1).

The code also requires nonconforming billboards--billboards erected prior to the enactment of the code and which violate the provisions of the code--to be removed under a variety of circumstances. The provision pertinent to this appeal is the "vacant-lot" provision, which prohibits billboards on any developed property and requires that "[a]ny existing billboard must be removed before a certificate of occupancy will be issued for a development on any undeveloped parcel." Tucson City Code § 3-59(a)(5)b.

Allegedly forced to remove, without compensation from the City, more than 20 billboards because of the vacant-lot provision, and seeking to prevent further removals, Whiteco filed its action under 42 U.S.C. § 1983 on October 17, 1986. Whiteco sought damages and declaratory and injunctive relief, alleging that Tucson's sign code violated Arizona statutory law, article II of the Arizona Constitution, and the First, Fifth, and Fourteenth Amendments to the United States Constitution. Both Whiteco and Tucson moved for summary judgment.

The district court initially held that the code violated the First Amendment by favoring commercial over noncommercial speech, but the court denied all of Whiteco's other claims. Following the 1987 amendment to the code allowing noncommercial speech to be substituted for commercial speech, the district court reconsidered its initial ruling and held that the code as amended did not violate the First Amendment. Before issuing this ruling, the district court denied Whiteco's request to file an amended complaint challenging the amended sign code. Whiteco appealed and has renewed each of its challenges to the sign code.

B.

Outdoor Systems is an Arizona corporation, which, like Whiteco, leases small areas of land, constructs billboards on them, and then leases advertising space on the billboards. Outdoor Systems leases billboards throughout the Phoenix metropolitan area, including the City of Mesa. Like Whiteco's billboards, Outdoor Systems's billboards carry commercial, noncommercial, and public service messages. Joining in Outdoor Systems's challenge is Milton Lee, as trustee for the Danny O. Lee Trust (Trust). The Trust owns a parcel of undeveloped land in Mesa upon which one of Outdoor Systems's billboards is located.

Mesa's sign code is similar in some respects to Tucson's and different in others. Like Tucson's, Mesa's sign code distinguishes between onsite and offsite signs, and defines offsite signs in a similar manner. Mesa City Code § 4-4-5. Mesa's code originally restricted and regulated offsite signs. In 1986, however, Mesa amended its code to prohibit them entirely. Mesa City Code § 4-4-4(B)(1)(d) (as amended 1988). Billboards are included within the definition of offsite signs.

Mesa's code contains a substitution provision nearly identical to that in Tucson's: "any non-commercial message may be substituted for the copy on any commercial sign allowed by the Sign Code." Mesa City Code § 4-4-6(S). It also contains a provision that excepts all noncommercial signs from the Code's definition of offsite signs. Mesa City Code § 4-4-5. Like Tucson's code, Mesa's requires obtaining a permit before any sign may be erected, altered, or relocated. Permit applications require submission of the content of the sign, and an application is to be approved if the appropriate city official determines that it "has been properly made and the sign complies with all appropriate laws and regulations of the City." Mesa City Code § 4-4-12(d)(1). There is no time limit for action upon applications.

Mesa's code also contains provisions governing nonconforming signs. These signs may not be altered, relocated, or replaced unless they are brought into compliance with the Code. Mesa City Code § 4-4-10(C)(3). In addition, section 4-4-10(C)(4) of the code, similar to Tucson's vacant-lot provision, provides, "Any construction permit which invokes Certficiate of Occupancy requirements shall specify and require that any nonconforming sign located within the boundaries of the development site authorized by said permit shall be brought into conformance with the provisions of this Code."

Subsequent to the 1986 amendment banning all offsite commercial signs, the Trust applied to the City for a building permit to construct a sports complex, replete with batting cages, trampolines, and a video arcade, on the property which supported Outdoor Systems's billboard. The City refused to issue the permit until the billboard was removed; the City also...