United Business Com. v. City of San Diego

CourtCalifornia Court of Appeals
Citation91 Cal.App.3d 156,154 Cal.Rptr. 263
Decision Date28 March 1979
PartiesUNITED BUSINESS COMMISSION, etc., et al., Plaintiffs and Appellants, v. CITY OF SAN DIEGO, a Municipal Corporation, Defendant and Respondent. Civ. 16731.

Robert M. Aran, Beverly Hills, for plaintiffs and appellants.

John W. Witt, City Atty., and C. Alan Sumption, Deputy City Atty., for defendant and respondent.

WIENER, Associate Justice.

United Business Commission and D.H.E. Enterprises, Inc., appeal from a declaratory judgment which held the City of San Diego's on-premises sign ordinance (Ord. No. 11718 (new series) and its amendments) constitutional. For the reasons which we will discuss, we have concluded the ordinance, including the imposition of reasonable sign inventory fees, is a valid exercise of the City's police power. The sign inventory fee is a regulatory license fee which does not violate the constitutional right of freedom of speech and does not deny to owners or users equal protection of the laws. The provisions of the ordinance are clear and reasonably certain in nature, affording substantive due process to those persons affected. We also conclude the amortization scheme for non-conforming signs to be reasonable on its face, as well as in its application to the property of D.H.E. Enterprises, Inc. We affirm the judgment.

Factual and Procedural Background

On March 6, 1973, the San Diego City Council enacted a comprehensive "on-premises" sign ordinance, regulating the "on-premises" signs in the commercial and industrial zones within the City (Ord. No. 11000 (new series)). The declared purpose of the law was as follows:

"This ordinance establishes the legal framework for a comprehensive system for the regulation of on-premises signs. It presents a set of reasonable, non-arbitrary, and non-discriminatory standards and controls, which are designed to optimize communication between the citizen and his environment, to facilitate the protection not only of the public, but the aesthetic character of the City, and to ensure the availability to the business community of adequate quality on-premises signs." (San Diego Mun.Code, § 101.1100, subd. (B).) 1

It was amended in a few respects on May 17, 1973 and October 25, 1973 by Ordinances Nos. 11064 and 11150, respectively. Ordinance No. 11000 as amended established requirements for the nature and structure of signs on business premises, the payment of building permit fees, a biennial "existing sign use" fee and for the abatement of nonconforming signs in two years subject to an extension upon appeal of an additional five years.

Shortly after the enactment of the ordinance, the City started an inspection and inventory of all on-premises signs in San Diego in order to enforce and administer the comprehensive sign ordinance, including the billing of the "existing sign use" fee. Plaintiff D.H.E. Enterprises, Inc. is one of those billed. Plaintiff United Business Commission is a non-profit corporation and a potential sign user. On August 14, 1974, they filed a complaint for injunctive and declaratory relief, seeking to have Ordinance No. 11000 as amended, declared unconstitutional in whole or in part. A preliminary injunction was granted on September 20, 1974, enjoining the City "from collecting the disputed sign fees until trial court resolves the matter."

On November 12, 1975, the city council adopted Ordinance No. 11718 which amended by repealing certain sections of Ordinance No. 11000 (as amended) while reenacting the majority of the sections in the original ordinance. Ordinance No. 11718 established a new fee structure for both building permits and fees for signs existing as of the effective date of Ordinance No. 11000 (April 5, 1973). It also provided for an amortization scheme which permitted signs in existence in 1973 to be in continued use until March 1, 1980, before conformance or removal, subject to a three-year extension upon appeal. Signs erected under Ordinance No. 11000 were not required to conform to the later regulatory revisions.

The new fee structure was based upon the City's 1974 study of the actual and estimated costs of issuing new building permits and the inspection and inventory of existing signs. The express purpose of the workup was to make the fee provisions reflect the direct costs of regulation and administration, as the study set off contributory funds from federal programs. Ordinance No. 11718 provided for a refund, which was in fact paid, to those sign users who had already paid fees under amended Ordinance No. 11000 which were greater than the newly designated fees. As to existing signs, the new fee was denominated a "one-time sign inventory fee" which replaced the biennial existing sign use fee of Ordinance No. 11000. Sign users were thus billed under Ordinance No. 11718.

On May 28, 1976, a supplemental complaint was filed alleging the invalidity of the new ordinance and specifically challenging the inventory fee on existing signs. During trial, by stipulation, the invalidity of the provisions of Ordinance No. 11718 relating to abatement and the termination of nonconforming signs was tried. The trial court declared Ordinance No. 11718, as amended, to be constitutional in all respects challenged.

Ordinance No. 11718 and the Sign Inventory Fee Constitute Valid Exercises of Police Power and are Regulatory in Nature

Plaintiffs initially contend the City's use of its police power in imposing a tax for revenue labeled as a "sign inventory fee" is unconstitutional. They also urge that since such a tax or revenue-bearing measure must be expressly provided for by the city charter and because charter sections 75 and 76 relating to annual tax and limit of tax levy fail to provide for such a tax, it is unauthorized and thus improper.

Pursuant to article XI, section 3[c] of the California Constitution, the City has elected to be a charter city with the responsibility of providing for its own government through the adoption of a charter. Concerning the content of the charter, article XI, section 5(a) of the California Constitution provides in pertinent part:

"It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws."

Further, article XI, section 7 expressly confers on cities the power to "make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws." "The power thus delegated to municipalities is as broad as that of the Legislature itself, providing the power is exercised within the confines of the city and is not in conflict with the state's general laws." (Carlin v. City of Palm Springs (1971) 14 Cal.App.3d 706, 711, 92 Cal.Rptr. 535, 539.)

"[T]he reasonable regulation of signs and billboards constitutes a valid exercise of police power." (Carlin v. City of Palm Springs, supra, atp. 712, 92 Cal.Rptr. at p. 539; see also Metromedia, Inc. v. City of Pasadena (1963) 216 Cal.App.2d 270, 273-274, 30 Cal.Rptr. 731; National Advertising Co. v. County of Monterey (1962) 211 Cal.App.2d 375, 378, 27 Cal.Rptr. 136, disapproved on other grounds in Metromedia, Inc. v. City of San Diego (1979) --- Cal.3d ---, at p. ---, 154 Cal.Rptr. 212, at p. 222, --- P.2d ----, at p. ----.) However, plaintiffs contest the propriety of the City's use of its police power in the imposition of a tax for revenue, labeled as an inventory fee. It is settled that a municipality under the police power may impose a license fee for the purpose of regulation, not revenue, where the fee constitutes an amount necessary to "legitimately assist in regulation and . . . not exceed the necessary or probable expense of issuing the license and of inspecting and regulating the . . . subject that it covers." (9 McQuillin Municipal Corporations (3d ed. rev.) § 26.15, p. 29; see County of Plumas v. Wheeler (1906) 149 Cal. 758, 763, 87 P. 909; Redwood Theatres v. City of Modesto (1948) 86 Cal.App.2d 907, 919, 196 P.2d 119.)

The determination of whether the actual purpose of an ordinance is regulatory or revenue-raising in nature is a question of fact. (City & County of San Francisco v. Boss (1948) 83 Cal.App.2d 445, 450, 189 P.2d 32; Davis v. City of San Diego (1939) 33 Cal.App.2d 190, 192, 91 P.2d 640.) In its determination, the court will look to the substantive provisions of the ordinance and not merely its title and form. (Oakland Raiders v. City of Berkeley (1976) 65 Cal.App.3d 623, 627, 137 Cal.Rptr. 648; Arnke v. City of Berkeley (1960) 185 Cal.App.2d 842, 847, 8 Cal.Rptr. 645.)

" 'If revenue is the primary purpose and regulation is merely incidental the imposition is a tax; while if regulation is the primary purpose the mere fact that incidentally a revenue is also obtained does not make the imposition a tax . . .' (Citations.) . . . 'In general, therefore, where the fee is imposed for the purpose of regulation, and the statute requires compliance with certain conditions in addition to the payment of the prescribed sum, such sum is a license proper, imposed by virtue of the police power; but where it is exacted solely for revenue purposes and its payment gives the right to carry on the business without any further conditions, it is a tax.' " (City & County of San Francisco v. Boss, supra, 83 Cal.App.2d at pp. 450-451, 189 P.2d at p. 35.)

The general rule is that a regulatory license or permit fee levied cannot exceed the sum reasonably necessary to cover the costs of the regulatory purpose sought. Such costs, however, include all those incident to the issuance of the license or permit, investigation, inspection, administration, maintenance of a system of supervision and enforcement. (County of Plumas v. Wheeler...

To continue reading

Request your trial
65 cases
  • Day v. Rosenthal
    • United States
    • California Court of Appeals
    • 8 août 1985
    ......(Rosenthal's law partner) and various law firms and business entities with which Rosenthal had been affiliated ... Rosenthal represented the Melchers in the United States Tax Court in the protracted litigation which ... (Cf. Crangle v. City Council of Crescent City (1933) 219 Cal. 239, 241-242, 26 ... (United Business Com. v. City of San Diego (1979) 91 Cal.App.3d 156, 182-183, ......
  • Rutherford v. State of California
    • United States
    • California Court of Appeals
    • 9 janvier 1987
    ......, violation of constitutional rights pursuant to 42 United States Code section 1983 and violation of rights guaranteed ... Rutherford obtained a Small Business Administration emergency loan to repair since the area had ...725; United Business Com. v. City of San Diego (1979) 91 Cal.App.3d 156, 176, 154 ......
  • Times Mirror Co. v. City of Los Angeles
    • United States
    • California Court of Appeals
    • 28 mai 1987
    ...... newspaper or newspapers, 1 the trial court determined that a business tax levied against them by defendant City of Los Angeles (City) was ... (United Business Com. v. City of San Diego (1979) 91 Cal.App.3d 156, 164, 154 ......
  • Tahoe Regional Planning Agency v. King
    • United States
    • California Court of Appeals
    • 26 juin 1991
    ......Owen, Crowell, Susich, Owen & Tackes, Ltd., Carson City, Nev., for plaintiff and appellant. . ... compensation clause of the Fifth Amendment of the United States Constitution. .         Defendants are ...' use or ownership, the signs have "advertised a business or similar economic means for the production of income," ...v. City of San Diego (1980) 26 Cal.3d 848, 881, 164 Cal.Rptr. 510, 610 P.2d 407, ... (United Business Com. v. City of San Diego (1979) 91 Cal.App.3d 156, 164, 154 ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT