Summit Media LLC v. City of Los Angeles, Ca, CV 07-2649 RSWL (AJWx).

• Decision Date: 02 January 2008
• Docket Number: No. CV 07-2649 RSWL (AJWx).,CV 07-2649 RSWL (AJWx).
• Citation: 530 F.Supp.2d 1084
• Court: U.S. District Court — Central District of California
• Parties: SUMMIT MEDIA LLC, a California limited liability company, Plaintiff, v. CITY OF LOS ANGELES, CALIFORNIA charter city, and Los Angeles Department of Building and Safety, Defendants. CBS Outdoor, Inc., a Delaware corporation, and Clear Channel Outdoor, Inc., a Delaware corporation, Intervenor-Defendants.

530 F.Supp.2d 1084

SUMMIT MEDIA LLC, a California limited liability company, Plaintiff, v. CITY OF LOS ANGELES, CALIFORNIA charter city, and Los Angeles Department of Building and Safety, Defendants CBS Outdoor, Inc., a Delaware corporation, and Clear Channel Outdoor, Inc., a Delaware corporation, Intervenor-Defendants.

No. CV 07-2649 RSWL (AJWx).

United States District Court, C.D. California.

January 2, 2008.

COPYRIGHT MATERIAL OMITTED

Andrew J. Thomas, Davis Wright Tremaine, Los Angeles, CA, Gary S. Mobley, Gary S. Mobley Law Offices, Newport Beach, CA, for Plaintiff.

Jeri L. Burge, Steven N. Blau, Rockard J. Delgadillo, Los Angeles City Attorney's Office, Los Angeles, CA, for Defendants.

Gregory Alan Fayer, Laura W. Brill, Richard B. Kendall, Irell and Manella, Janet Lynn Grumer, Kelli L. Sager, Davis Wright Tremaine, Los Angeles, CA, for Intervenor-Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT — CITY'S MOTION TO DISMISS

ORDER DENYING PLAINTIFF'S MOTION TO STRIKE

ORDER GRANTING INTERVENING DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

RONALD S.W. LEW, Senior District Judge.

Defendant, City of Los Angeles' (hereafter "City") Motion to Dismiss, Plaintiffs Motion to Strike and Intervenor Defendant, Clear Channel Outdoor, Inc.'s¹ Motion for Judgment on the Pleadings came on for regular hearing before this Court on December 19, 2007.

Having considered all the papers and arguments submitted on this matter, THIS

COURT NOW FINDS AND RULES AS FOLLOWS:

As a preliminary matter, each party's Requests for Judicial Notice is GRANTED with the exception of Exhibit ten and eleven to Defendant City's Motion to Dismiss.

Moreover, Intervenor Defendant CBS Outdoor, Inc.'s ("CBSO") Joinder in Clear Channel's Motion for Judgment on the Pleadings is GRANTED.

I. DEFENDANT, CITY OF LOS ANGELES, MOTION TO DISMISS

In a Rule 12(b)(6) motion to dismiss, the Court must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the nonmoving party. Klalfeld v. United States, 944 F.2d 583, 585 (9th Cir.1991). A party need not state the legal basis for his claim, only the facts underlying it. McCalden v. California Library Ass'n, 955 F.2d 1214, 1223 (9th Cir.1990).

When a complaint adequately states a claim, it may not be dismissed based on a district court's assessment that the plaintiff will fail to find evidentiary support for his allegations or prove his claim to the satisfaction of the factfinder. Bell Atl. Corp. v. Twombly, ___ U.S. ___, ___, 127 S.Ct. 1955, 1969, 167 L.Ed.2d 929 (2007); Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) (a district court weighing a motion to dismiss asks "not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims"). The court need not accept conclusory allegations or unreasonable inferences as true. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981).

1. Plaintiffs First Claim For Declaratory and Injunctive Relief First Amendment — Commercial Speech

City argues that Plaintiffs First Claim for Relief necessarily fails because City, as a matter of law, may enact different regulations applicable to private as compared with public property. (City MTD at 13.)

Though entitled to some First Amendment protection, commercial speech is afforded less protection than other forms of expression. Central Hudson Gas & Elec. Corp. v. Pub. Sera Comm'n, 447 U.S. 557, 562-63, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). The Supreme Court has reiterated and reaffirmed that the Central Hudson test is appropriately employed in determining "whether a particular commercial speech regulation is constitutionally permissible." Thompson v. W. States Med. Ctr., 535 U.S. 357, 367, 122 S.Ct. 1497, 152 L.Ed.2d 563 (2002). The protection for a particular commercial expression turns on the nature of the expression and the governmental interests served by its regulation. Central Hudson, 447 U.S. at 562-63, 100 S.Ct. 2343.

Under Central Hudson, a governmental restriction on commercial speech is protected by the First Amendment if the speech: (1) concerns lawful activity and is not misleading; (2) seeks to implement a substantial governmental interest; (3) directly advances that interest; and (4) reaches no further than necessary to accomplish the objective. Id. at 562-66, 100 S.Ct. 2343. The Supreme Court has held that traffic safety and a city's aesthetics are substantial governmental interests. Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 507-08, 101 S.Ct. 2882, 69 L.Ed.2d 800 (1981).

With regard to the third prong, that the regulation directly advance the government's interests, the Supreme Court has noted that "[t]his burden is not satisfied by mere speculation or conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree." Greater New Orleans Broad. Ass'n v. United States, 527 U.S. 173, 188, 119 S.Ct. 1923, 144 L.Ed.2d 161 (1999) (citation omitted). Therefore, "the regulation may not be sustained if it provides only ineffective or remote support for the government's purpose." Id. (quoting Central Hudson, 447 U.S. at 564, 100 S.Ct. 2343).

Here, Plaintiff concedes that the first two prongs of Central Hudson have bean met. (Opp. City's MTD at 5.) Plaintiff, however, contends that, as to the third and fourth prong, Plaintiff has properly stated a claim for relief. (Opp. City's MTD at 5-6.) According to Plaintiff, City's contention that the enactment of the Signage Ordinance "is to promote public safety"² is directly undermined by City's contracts with other billboard companies. Plaintiff has adequate stated a claim for relief. Plaintiff alleges that the Sign Ordinance is unconstitutional as applied because it improperly limits commercial speech and City's justification for the limitation is inadequate. Because this pleading effectively shifts the burden to City, City's Motion to Dismiss Plaintiff's First Claim is DENIED.

2. Plaintiff's Second Claim For Relief

City moves to dismiss Plaintiffs Second Claim for Relief for failure to adequately state a claim for relief. According to City, Plaintiffs facial challenge fails because the statute in question does not by its terms seek to regulate speech. (City MTD at 15, citing Roulette v. City of Seattle, 97 F.3d 300, 303 (9th Cir.1996).)

"Any system of prior restraints of expression comes to this Court bearing a heavy presumption against its constitutional validity." Freedman, 380 U.S. at 57, 85 S.Ct. 734 (quoting Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 70, 83 S.Ct. 631, 9 L.Ed.2d 584 (1963)) (internal quotation marks omitted). In Freedman, the Supreme Court detailed the "procedural safeguards" that must accompany prior restraints on speech, setting a high hurdle for the government to clear before a restraint can be held constitutional. Id. at 58. Freedman concluded that "only a judicial determination in an adversary proceeding ensures the necessary sensitivity to freedom of expression, [thus] only a procedure requiring a judicial determination suffices to impose a valid final restraint." Id. The question is not whether there is indeed censorship, but whether there are fixed objective standards governing the exercise of a First Amendment activity. See City of Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 757-58, 108 S.Ct. 2138, 100 L.Ed.2d 771 (1988).

Here, Plaintiff alleges in its complaint that the exceptions created by City for "off-site signage on City-owned property or permitted pursuant to a variance, legally adopted specific plan, supplemental use district approved development agreement contain no standards whatsoever to control the City's exercise of its discretion to allow off-site signage under these exceptions." (Compl. at ¶ 67.)

City does not dispute this point and instead focuses on the fact that the ordinance does not by its terms "regulate speech." (City MTD at 5.) As an initial matter, City is misreading the holding in Roulette. In Roulette, the challenged ordinance prohibited laying or sitting on the sidewalk. Roulette, 97 F.3d at 304. Whereas here, the ordinance is regulating the use of billboard signs, which contains speech or other conduct commonly associated with expression.

Plaintiff has adequately plead a prior restraint on speech in violation of the First Amendment because Plaintiff has alleged that the Ordinance fails to have fixed objective standards governing the exercise of a First Amendment activity. Therefore, City's Motion to Dismiss Plaintiff's Second Claim is DENIED.

3. Plaintiff's Third Claim For Regulation of Non-Commercial Speech

City moves to Dismiss Plaintiffs Third Claim for Relief on the basis that the regulations are content neutral. (City MTD at 16-17.) According to Plaintiff, the impact of the regulation will be to limit noncommercial speech because any permit holder will refuse to allow non-commercial speech in place of commercial speech for which they are compensated. (Opp. City's MTD at 11.)

Plaintiff alleges that LAMC § 91.6205.1 impermissibly discriminates in favor of commercial speech. Taking inferences in favor of Plaintiff, the non-moving party, Plaintiff has adequately stated a claim for relief.

Therefore, City's Motion to Dismiss Plaintiffs Third Claim is DENIED.

4. Plaintiffs Fourth Claim for Relief Based on Regulation of Speech Based on Content

City moves to dismiss Plaintiffs Fourth Claim for Relief on the basis that Plaintiff does not have standing to bring this claim. (City MTD at 17.) Plaintiff however asserts that it is not challenging the Settlement Agreements³ entered into by City with other Media companies, but that those agreements render the City's general prohibition of off site signs unconstitutional as applied. (Opp. at 12.)

As an initial...