White Coat Waste Project v. Greater Richmond Transit Co.

Decision Date30 May 2020
Docket NumberCivil Action No. 3:17cv719
Citation463 F.Supp.3d 661
CourtU.S. District Court — Eastern District of Virginia
Parties WHITE COAT WASTE PROJECT, Plaintiff, v. GREATER RICHMOND TRANSIT COMPANY, Defendant.

Jeffrey E. Fogel, Charlottesville, VA, Matthew Daniel Strugar, Pro Hac Vice, Law Office of Matthew Strugar, Los Angeles, CA, for Plaintiff.

Richard Earl Hill, Jr., Office of the City Attorney, Richmond, VA, for Defendant.

MEMORANDUM OPINION

M. Hannah Lauck, United States District Judge

This First Amendment action arises out of Defendant Greater Richmond Transit Company's refusal to air what it deemed a political advertisement by Plaintiff White Coat Waste Project concerning the treatment of test-animals at the Hunter Holmes McGuire VA Medical Center in Richmond, Virginia. This matter comes before the Court on White Coat Waste Project's ("White Coat") Motion for Summary Judgment, (ECF No. 25), and Greater Richmond Transit Company's ("GRTC") Motion for Summary Judgment, (ECF No. 30). GRTC and White Coat responded to the cross-motions for summary judgment. (ECF Nos. 34, 35.) Accordingly, the matter is ripe for disposition.

The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1331.1 For the reasons that follow, the Court will grant in part and deny in part White Coat's Motion for Summary Judgment, and will grant in part and deny in part GRTC's Motion for Summary Judgment.

I. Factual and Procedural Background

White Coat brings this action against GRTC pursuant to 42 U.S.C. §§ 1983 and 1988,2 asserting that GRTC's advertising policy (the "Advertising Policy"), which prohibits "political ads," offends the First and Fourteenth Amendments both facially and as applied to White Coat.3 (Compl. 12, ECF No. 1.) GRTC initially filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)4 for failure to state a claim. (GRTC Mot. Dismiss, ECF No. 8).The Court denied GRTC's Motion to Dismiss, finding that White Coat had stated a viewpoint discrimination claim and vagueness claim upon which relief could be granted. (Sept. 25, 2018 Mem. Op., ECF No. 15.) The Parties then filed cross-motions for summary judgment, and both Parties filed responses in opposition. The Court sets forth below the undisputed facts taken from the record.

A. Factual Background 5

White Coat describes itself as a "bipartisan non-profit taxpayer watchdog organization" that seeks to "unite animal-lovers and liberty-lovers to expose and end wasteful taxpayer-funded animal experiments." (Compl. ¶ 3.) In support of this mission, White Coat currently operates a campaign "to end taxpayer funding for dog experiments at the Richmond Hunter Holmes McGuire VA Medical Center," the ("McGuire VA Center"). (Id. ¶ 8.)

In 1973, GRTC "was incorporated as a nonprofit corporation ‘for the purpose of providing mass transportation [in Richmond and nearby environs] service as a public service corporation.’ " (White Coat Mot. Summ. J., Strugar Decl., Ex. A, "GRTC Responses and Objections to Plaintiff's First Set of Interrogatories," ECF No. 26-1.) GRTC's Advertising Policy, as developed, prohibits various types of advertisements, including "[a]ll political ads." (Strugar Decl., Ex. H, "GRTC Advertising Policy.")

1. History and Ownership Structure of GRTC

In April 1973,6 the City of Richmond incorporated GRTC "as a nonprofit corporation ‘for the purpose of providing mass transportation service as a public service corporation.’ " (GRTC Responses and Objections to Plaintiff's First Set of Interrogatories, Resp. No. 1); (Mem. Supp. GRTC Mot. Summ. J., Ex. G, "Deposition of Sheryl Adams," 15–16, ECF No. 31–7.)7 GRTC offers space on the interior and exterior of its buses to advertisers. (Mem. Supp. GRTC Mot. Summ. J., Ex. H, "Deposition of Carrie Rose Pace," 27, ECF No. 31–8). As is true for most public transportation systems, GRTC provides its service to the public below cost. (Adams Dep. 26.)

At the time of GRTC's founding, VTC's employees were unionized, but federal law mandated that federal funds could be made available only to transit operators which preserved "already-existing collective bargaining rights." (Hurd, Public Transportation 26); (Strugar Decl., Ex. C, "GRTC's Answers to Plaintiffs’ Second Set of Requests for Admissions," Resp. No. 17); (Adams Dep. 37–39.) Virginia law, however, "prohibit[ed] collective bargaining with the representatives of public employees." (Hurd, Public Transportation 26.) To resolve this conflict, the Richmond City Attorney and Assistant City Attorney proposed that the "city form a non-profit corporation under the general laws of Virginia, the voting stock of which would be owned by the City of Richmond ... [so that]8 ... the U.S. Department of Transportation would—as it did—find that the wholly-owned corporation was an instrumentality of the city and was, therefore, a ‘public body’ within the meaning of [federal law], eligible to apply for and receive federal grants." (Hurd, Public Transportation 26.) This public stock corporation structure allowed the former VTC "employees to continue to collectively bargain while also retaining eligibility for federal grant money."9 (GRTC's Answers to Plaintiffs’ Second Set of Requests for Admissions, Resp. No. 17); (see also Adams Dep. 37–39.)

a. The Virginia General Assembly Amended the Richmond City Charter in 1973 to Allow for the Creation of GRTC

On March 15, 1973, the General Assembly of the Commonwealth of Virginia "amended the Richmond City Charter to provide that ‘the city shall have the power to acquire, operate, lease, or otherwise provide for the operation of a public transportation system ... both within and outside the City of Richmond " (the "1973 Charter Amendment"). (White Coat Req. Judicial Notice Ex. A "Acts and Joint Resolutions of the General Assembly of the Commonwealth of Virginia, Session 1973, Chapter 348, sec. 2," ECF No. 28.) In April 1973, in accordance with the 1973 Charter Amendment, the City of Richmond created GRTC through the State Corporation Commission under Virginia's Stock Corporation Act.10 (Mem. Supp. GRTC Mot. Summ. J., Ex. B, "GRTC Articles of Incorporation," 23–24); (Adams Dep. 37.) Following incorporation, the Richmond City Manager negotiated the sale of VTC's physical assets to GRTC, (Hurd, Public Transportation 24), and the Richmond City Council "appropriated $2,134,000 in bond funds as a grant to [GRTC] for the purpose of enabling it to meet the local share of the capital costs of acquiring and improving the transit system," (id. 25.)

b. The City of Richmond and Chesterfield County Own GRTC's Common Stock and Control Key Aspects of GRTC Operations

The City of Richmond originally owned all of GRTC's stock. (Hurd, Public Transportation 24.) Currently, ten shares of GRTC stock exist, with the City of Richmond and Chesterfield County each owning five shares. (Adams Dep. 14–15.) No entity other than the City of Richmond and Chesterfield County has at any time owned GRTC's stock. (Id. )

A six-member Board of Directors ("the Board") operates GRTC today.11 (Adams Dep. 15.) While Richmond initially appointed all board members, now the Richmond City Council appoints three members of the Board and the Chesterfield County Board of Supervisors appoints the other three. (Hurd, Public Transportation 24); (Adams Dep. 17–18.) Members of the GRTC Board serve a one-year term and can be removed by the local government entity that appointed them. (Adams Dep. 21.) Nothing in the Record provided to the Court suggests that limits exist on who can be appointed or on how long renewal of terms may continue.

GRTC's buses utilize "public use" license plates, and GRTC remains "subject to [Virginia's Freedom of Information Act] because it is a ‘public body’ under Virginia Code § 2.2-3701." (GRTC's Responses and Objections to Plaintiff's First Set of Interrogatories, Resp. No. 14); (Adams Dep. 37.) The Richmond City Attorney's office provides legal services to GRTC. (Mem. Supp. White Coat Mot. Summ. J. 5, ECF No. 29); see Richmond City Code § 2-112(2) ("[t]he City Attorney shall provide such legal services as may be necessary and appropriate as requested by the following entities ... [including] [t]he Greater Richmond Transit Company, including representation for its officers and employees with respect to certain claims for damages").

As with its private predecessor VTC, the City of Richmond must authorize any fare increases that GRTC wishes to institute within the city limits, and the City of Richmond's mayor's office must be consulted regarding any proposed changes to any of GRTC's routes within the City. (Adams Dep. 17); (see Hurd, Public Transportation 23). The Chesterfield Board of Supervisors must approve any rate increase for routes in its county. (Adams Dep. 20.) Likewise, GRTC cannot decrease any rates without approval from the City of Richmond, the Chesterfield Board of Supervisors, or any other governing body with GRTC routes in its confines. (Id. 17, 20.)

Given that it operates at a loss, the GRTC Board approves an annual budget—accounting for projected fare revenue, advertising revenue, as well as federal and state contributions—and then makes a specific request to the City of Richmond and Chesterfield County (for their respective routes) asking for the necessary funds to cover the shortfall in the budget. (Adams Dep. 29–30.) Between 2010 and 2017, the City of Richmond provided eleven to fourteen million dollars to GRTC per fiscal year. (Mem Supp. GRTC Mot. Summ. J., Ex. E, "GRTC Operating Budget," ECF No. 31-5); (Adams Dep. 29–30.) The City of Richmond typically provides between 23%–30% of GRTC's annual revenue, constituting the largest share of government funding. (GRTC Operating Budget); (Adams Dep. 28.) Federal transportation subsidies account for anywhere between 10%–19% of GRTC's annual...

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