Agenda Item # 10.1 - John Miller | Received 03/14/2023CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email.
From:John Miller
To:City Clerk; Mayor Marie Blankley; Council Member Rebeca Armendariz; Council Member Dion Bracco; Council Member Tom Cline; Council Member Zachary Hilton; Council Member Carol Marques; Council Member Fred Tovar;
Cindy McCormick; Thai Pham; Christina Ruiz; Sharon Goei
Cc:plynam; Leslie Levitt; Jason Hemp; Connie Rogers; Shani Kleinhaus; No Digital Billboards In San Jose
Subject:EXTERNAL - Comments regarding the Proposed Off Premise Billboards in Gilroy
Date:Tuesday, March 14, 2023 6:19:53 AM
Attachments:23-2-2 Applicant letter.PDF
Summary of Outfront Media’s Feb. 2 Letter to Gilroy PC pdf.pdf
PRECOMMITMENT copy.pdf
ALL Attachments & Exhibits.pdf
Dear Mayor Blankley and Gilroy City Council Members,
My name is John Miller. I’m on the Steering Committee of No Digital Billboards in San Jose.
I’m writing to express opposition to allowing digital billboards in Gilroy. We believe many of the experiences we have had in opposing the plan to permit digital
billboards in San Jose to be relevant to the proposal you are considering.
Currently Gilroy, like the majority of jurisdictions in Santa Clara County, prohibits off premise advertising. To be clear, we are talking about signs or billboards, (digital or
not), that advertise products and services not available at the location of the sign. Again to be clear, off premise signs are not on premise signs, (digital or not), that identify
a business, retailer, or office building.
Here are questions concerning the proposed billboards in Gilroy that need to answered for the City Council to properly evaluate the proposal. The first, who is the
applicant appealing the decision of the Planning Commission to reject this proposal? Is it Mr. Conrotto or is it out of town Outfront Media, headquartered in New York
City, and who as far as we know, employs not a single person who actually lives in Gilroy? One or the other ought to be the designated applicant and only one of them
should be allowed to present their case before the Council, not three people making three presentations representing one applicant as happened before the Planning
Commission. To my knowledge none of the proposals' opponents have had three opportunities to publicly make their case before a city body so far.
An equally compelling question — have members of the City Council received even one phone call from one resident who said, “What this town needs are digital
billboards”? They did not at least not until Mr. Conrotto and his favorite billboard company, Outfront Media, got certain people excited about the many alleged benefits of
digital billboards. One group, Gilroy’s auto dealers, thinks it will dramatically increase sales from advertising on a billboard.
In reality, customer purchasing behavior is complex. So how do we make decisions about buying cars? While the billboard companies want us to believe the answer to all
business problems is to put up a billboard, the study below concludes billboards play no role in advertising decisions influencing how we purchase cars. (Attachment #1)
All attachments referenced are attached in one file at the end of this email.
Source: Types of ads influencing car-buying decisions in the U.S. as of October 2012, Published by Statista Research Department, Oct 24,
2012, https://www.statista.com/statistics/259115/types-of-ads-influencing-car-buying-decisions-in-the-us/
Though this study is now 11 years old, given the advances of online technology including the importance of social media, logic would suggest that the study’s conclusions
are even more true today. See below more recent studies that affirm the findings of the Statista research. (Attachment #2).
Outfront Media also stirred up excitement by donning the guise of a philanthropy anxious to give away valuable advertising space on digital billboards for community
messages or for Amber Alerts or other emergency notifications or for “branding” the community by putting Gilroy’s name on the billboard.
But the truth is billboard companies, and the property owners that lease their land to them, seek to negate billboard bans in communities like Gilroy because billboards,
especially digital billboards, are very profitable. And they are particularly profitable when they advertise the products and services of national advertisers such as Citibank,
Verizon, Coke and McDonalds. Despite the claims that have been made by Outfront Media regarding the extent to which digital billboards carry advertisements for local
businesses, our experience documents a medium in which national advertising dominates. In that regard, many of the small, one or two person businesses, that signed the
petition submitted by Outfront Media in support of this proposal would not be able to afford to advertise on a $900,000 digital billboard. In fact, we’re unconvinced even
the Gilroy auto dealers will find such a billboard affordable (if even available) despite Outfront insisting it will be. Accordingly, please see the short video we have
recently prepared about just what products and services get advertised on digital billboards in the Bay Area, https://www.youtube.com/watch?v=LEDF-
WuhF1E (Attachment #3).
According to Outfront Media, one of the most significant alleged benefits to Gilroy from billboards is supposed to be a dramatic increase in sales for local advertisers and
correspondingly a dramatic increase for Gilroy from increased sales taxes. Note that much of the evidence for such claims is based on out of state and out of date studies
(the dates of which have not been included in many of the references Outfront has provided in its Feb. 2nd letter to the Gilroy Planning Commission which is attached.
(Attachment #4).
Please refer to my detailed analysis below of the footnotes in the letter. Many of these same arguments have been presented directly to the City Council. (Attachment #5).
So according to Outfront, increased sales, increased sales taxes and even some mysterious cash payment from Outfront to the city are all forthcoming. These benefits, for
reasons unexplained, are to be negotiated after you Council members change the sign ordinance not before. Just to be clear, the Council is being asked by the proponents
of this proposal (and apparently by the city attorney) to change the ordinance. In essence, this would negate the prohibition on off premise signs plus water down several
of the provisions in the Gilroy General Plan on a vague promise that the specifics of what that will mean for the City are to be determined in a closed negotiation
symbolically off the radar and in the dead of night. Would you strike such a deal in conducting your personal financial affairs? Of course you wouldn’t. So why should
you do so when you are representing the interests of the City? In addition, doing so would be to delegate your powers of analysis and decision making to unelected city
staff, which would also constitute a lack of transparency and accountability that ought to be unacceptable.
And speaking of city staff, it was clear from the start that staff decided to support the proposal without, as far as I know, even presenting to decision makers the merits of
the opposition argument. Instead of being an honest broker bringing to the Planning Commission and to the City Council a balanced pro and con presentation as one would
expect, the staff put its thumb on the scales and supported the proposal apparently without reservation. Why is that the case? Is there no one in Gilroy government aware
of the CEQA prohibition against what is called a pre commitment? In every day language that means advocating a position as to literally prevent the decision making body
from reaching another conclusion than that supported by the staff. Doing so can get you sued. For details see the attached article on pre commitment from the California
Law Reporter. (Attachment #6).
In addition to process issues the City Council should know that the majority of other jurisdictions in Santa Clara County protect their residents and visitors from being
forced to look at unsolicited commercial messages on billboards. Why would Gilroy do the opposite, allowing its residents and visitors to be a captive audience to
unsolicited commercial messages for which there is no off switch? Does Mr. Conrotto subscribe to a cable TV channel that shows only commercials and no programming?
Of course he doesn’t. And he would resent being forced to. Yet in advocating for this proposal he is expecting his fellow Gilroy residents to become exactly that — a
captive audience as they drive on a publicly supported road, the maintenance of which is paid for by them and not by Outfront Media. In fact, unlike a trucking company
Outfront pays no road user fee at all though its' billboards have no value except in their exposure to the public right of way. There is a word to describe such a practice and
it is the word “parasite."
But we have been reassured that this proposal you are considering allows for only two digital billboards, or is it actually three? Even before the ordinance has been
changed and before terms of the deal worked out behind closed doors advocates are already pushing for additional billboards to be part of the deal. We told you so. This is
exactly how the billboard industry works.
If the Council approves the proposed billboards what argument will it make when others in the community want to put billboards on their property? Is the City is going to
grant Mr. Conrotto and Outfront Media an exclusive municipal charter thereby excluding all other property owners in town (and their favorite billboard company), from
constructing their own billboards? On what grounds will the City defend itself (at taxpayer expense) when the lawsuits begin? If you doubt the litigious nature of the
billboard industry, as representative, I quote from Outfront Media's
own 2021 United States Securities and Exchange Commission, Form 10K, dated December 31, 2021, (in which litigation is mentioned 12 times):
Item 3. Legal Proceedings.
On an ongoing basis, we are engaged in lawsuits and governmental proceedings and respond to various investigations,
inquiries, notices and claims from national, state and local governmental and other authorities (collectively, “litigation”).
Litigation is inherently uncertain and always difficult to predict. Although it is not possible to predict with certainty the
eventual outcome of any litigation, in our opinion, none of our current litigation is expected to have a material adverse effect on our results of operations,
financial position or cash flows
Source: https://s23.q4cdn.com/429815947/files/doc_financials/2021/q4/Final-2021.12.31-10-K-Outfront.pdf Also see attached a representative listing of multiple lawsuits
entered into by Outfront Media in several states over the past 8 years. (Attachment #7).
Please understand that opponents of this proposal are not anti business. We believe there is a difference between a government and a business and that the city of Gilroy
should not be operated as if it were indistinguishable from a business. It should not evaluate public policy only on how much revenue it might generate for one or two
favored businesses in town or for the city itself especially when how much revenue would go to the City won’t be determined until after the ordinance is changed and it
may be too late to amend or cancel the deal.
Remember there is no constitutional right to put up a billboard. Nobody has a right to put up a billboard that is more important than the collective right of the community
to prohibit them.
That has been reaffirmed in the nation’s highest court.
Finally, I would suggest what common sense dictates. If something sounds too good to be true it probably is too good to be true. To be blunt, Outfront Media, a publicly
traded company with annual revenue of $1.7 billion, thinks it is conning the rubes. The people of Gilroy are depending on you, the City Council, not to fall for it.
Thank you for your time and attention.
Sincerely,
John Miller
No Digital Billboards in San Jose
19314880.8
February 2, 2023
VIA ELECTRONIC MAIL
City of Gilroy Planning Commission
Sharon Goei, Community Development Director
Cindy McCormick, Senior Planner
City of Gilroy
7351 Rosanna Street Gilroy, CA 95020
Re: Potential Benefits of Digital Billboards to the City of Gilroy’s Economy
Dear Ms. Goei and Ms. McCormick,
During the Planning Commission's January 19, 2023 public hearing on a proposed electronic
billboard ordinance, members of the Planning Commission and the public inquired about the
benefits of allowing digital billboards in the City. More simply, people asked, "Why should the
City consider doing this?"
By this letter, we would like to answer this question.
Individual billboards would be subject to a development agreement between the City and a sign
owner, which is a contractual arrangement that would provide the City with certain direct
benefits, such as free municipal advertising time and a revenue share. However, there are more
significant, indirect benefits that the City and its business community would experience from
allowing digital signage.
Billboards have been a fixture of the advertising landscape for decades, providing businesses
with a cost-effective way to reach a wide audience. As an advertising tool for businesses of all sizes, billboards provide a significant contribution to the economic health of local governments.
Billboards do so by increasing the visibility of mom-and-pop businesses; increasing sales for
larger, formula retail stores; and promoting local involvement (i.e., advertising civic and
municipal events to attract people to the City to spend money on local businesses). Outdoor
advertising thereby increases profits for local businesses and sales tax revenue for local governments.
For the City of Gilroy, a modest allowance for digital, outdoor advertising would offer the
following potential economic benefits:
• An enhancement of commercial sales in City businesses, including without limitation its
retail shopping outlets, Newman Development, Regency Center, and Downtown Core,
by $4.1 million to $16.7 million (representing a conservative range of 5 to 20%).1
• An increase in City sales and other tax revenues by $760,000 and $3.1 million
(representing a conservative range of 5 to 20%), which could fund a variety of public
1 The potential upside is a 25% increase in sales, although we chose to present a more
conservative figure of 20% increase.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 2
19314880.8
programs, such as salary increases for police, fire, and other city workers, or
improvements in public infrastructure and equipment.
The availability of outdoor advertising would support Gilroy's local businesses. While it is
uncertain what percentage of advertising sign would be utilized by local businesses, nationwide
statistics have shown that local business represent approximately 70% of advertising industry
revenues.2 In the San Francisco Bay Area Market, local businesses have accounted for 64% of
the total billboard advertising market.
Meanwhile, the City's economy is well-positioned to benefit from outdoor advertising, even in a
limited amount. The City generates most of its sales tax revenue from industries that typically
use billboards, such as outlet centers, auto dealers, service stations, and the hospitality
industry.3 Together, these businesses contribute $15.2 million to the City’s annual sales tax revenue of $18.3 million, and approximately $1.35 million in transient occupancy taxes
annually.4 Since businesses estimate that outdoor advertising contributes up to 20% of the their
sales, outdoor advertising could add as much as $3.1 million in additional City’s sales tax per
year, in addition to increases in transient occupancy taxes.5
This letter analyzes the ways in which outdoor advertising supports local businesses and
formula retail businesses (e.g., stores populating outlets) by expanding their customer base and
revenues. This letter also evaluates the significance of outdoor advertising’s contribution to local
economies, including the City’s economic well-being.
I. Outdoor Advertising is beneficial to small and local businesses
For local businesses, billboards have the following benefits in that they:
• help to communicate with and attract new customers;
• allow efficient targeting of consumers in a given trade area; and
• are cost-effective compared to other traditional media.
Furthermore, the size and placement flexibility of billboards allow them to serve a function that is
different from a business’ on premise signage. Small and local businesses, travel-related
businesses such as hotels, restaurants, gas stations, and businesses related to entertainment
and tourism are more reliant on billboards than other types of businesses due to the need to
2 FLORIDA TAX WATCH, T HE ECONOMIC IMPACT OF F LORIDA ’S OUTDOOR ADVERTISING INDUSTRY
FROM A PRE- AND POST-SEPTEMBER 11, 2001 PERSPECTIVE at 3 (data from national surveys).
3 CITY OF GILROY , ADOPTED BIENNIAL BUDGET 254 (adopted June 7, 2021),
https://www.cityofgilroy.org/DocumentCenter/View/12223/Fiscal-Year-2022-and -2023-Adopted -
Budget.
4 Id.
5 Id.; Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH 150, 150 & 159.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 3
19314880.8
direct motorists to their location or convince them of the benefits of the business as they pass
by.6
Given this pattern, businesses do not generally see other media as cost-effective substitutes for
billboards. Flyers can be locally targeted but have limited potential for effective reach.7 Other
local media, such as newspapers, radio, and television, involve both higher cost per thousand
exposures and waste circulation.8 Additionally, production costs associated with developing
billboards are generally substantially lower than traditional media such as magazines, radio, and
television.9 Online and email advertisements can be effective, but often end up in spam folders.
On average, it costs $7.50 to reach 1,000 people with digital place-based media.10 Compared to
other media sources, it costs approximately $6.75 for radio, $23.33 for podcasts, $13.24 for
magazines, $46.82 for newspaper, $20 for broadcasting TV, $12 for cable TV, and $2.21 - $10.47 for online advertising per 1,000 people.11
Across industries, local and small businesses represent about 77% of advertisers, and 92% of
them (about 70% of all billboard advertisers) have less than 50 employees.12 Local businesses,
meanwhile, represent approximately 70% of outdoor advertising industry revenues.13 Data also
confirms that businesses electing to use outdoor advertising are repeat customers, finding value
in this median. For instance, the median user has been in business for between 11 and 25
years and has been using billboards within the same 11-25 year range.14 In fact, historical
evidence shows that states banning billboards lag behind other states in new business
formations and in tourism spending.15
With respect to the City of Gilroy, outdoor advertising could increase revenue for local retail
stores and the hospitality industry within the City, whi ch in turn are important to the vitality of the
City’s economic health. As noted above, hotels, restaurants, gas stations, and businesses
6 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH at 152 -53; see, e.g., FLORIDA TAX WATCH, THE
ECONOMIC IMPACT OF FLORIDA’S OUTDOOR ADVERTISING INDUSTRY FROM A PRE-
AND POST -SEPTEMBER 11, 2001 PERSPECTIVE a t 3-4 & fns. 3-5 (February 2002) (showing
similar data from multiple national surveys).
7 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH at 159.
8 Id. at 159.
9 Id.
10 Soloman Partners, Media CPM Comparisons (January 2022); Outfront Media data.
11 Soloman Partners, Media CPM Comparisons (January 2022); Outfront Media data.
12 FLORIDA T AX WATCH, THE ECONOMIC IMPACT OF FLORIDA ’S OUTDOOR ADVERTISING INDUSTRY
FROM A PRE- AND POST-SEPTEMBER 11, 2001 PERSPECTIVE at 3 (data from national surveys).
13 Id.
14 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH at 154.
15 WILLIAM LILLEY III, LAURENCE J. DEFRANCO, AND CLARENCE W. BUFFALO, AN ANALYTICAL
INQUIRY : DO STATES THAT BAN BILLBOARDS HAVE INCREASED TOURISM AND IMPROV ED
ECONOMIES ?, IMAP DATA INC. 3 (September 2001).
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 4
19314880.8
related to entertainment and tourism are prime beneficiaries of outdoor advertising, which could
boost sales by up to 20%.16 In the City of Gilroy, there are at least 17 hotels, 89 restaurants,
and 19 gas stations, and many other hospitality business. We understand these businesses especially thrive during City events such as the Gilroy Garlic festival, Garlic City Car Show, and
Gilroy Farmers’ Market.17
II. Outdoor advertising could result in millions of dollars in increased profits for
Gilroy businesses
Outdoor advertising has a positive impact on all businesses — not only local, mom-and-pop
stores, but formula retail outlet stores and automotive dealerships.18
By way of example, in 2019, Outfront Media commissioned a study on the effect of outdoor advertising on the automotive industry. This study found that use of outdoor advertising can
boost sales in the automotive industry, with exposure to outdoor ads resulting in a 17% increase
in the likelihood of purchasing a new vehicle.19 Outdoor advertising can also indirectly drive
consumer action. Among those consumers viewing an automotive advertisement on an outdoor
advertising display, 43% engaged with the ad by ways of subsequently visiting a website,
conducting research online, or sharing information by words of mouth. Approximately 20%
followed the dealer or brand on social media.20
In other industries, it is estimated that outdoor advertising can increase a businesses’ total sales
by as much as 20%.21
For Gilroy, businesses within the City could potentially see increased sales as follows:
• Auto sales, which currently generate approximately $36.2 million in revenue per year,
could see an increase of $1.8 million to $7.2 million (representing a conservative range
of 5 to 20%).
• Other City businesses, which currently generate approximately $47.4 million in revenues
per year, could see an increase of $2.3 million to $9.5 million (representing a
conservative range of 5 to 20%).
16 Id. at 150 & 159.
17 For more information, visit https://visitgilroy.com/restaurants/.
18 WILLIAM LILLEY III, LAURENCE J. DEFRANCO, AND CLARENCE W. BUFFALO, AN ANALYTICAL
INQUIRY : DO STATES THAT BAN BILLBOARDS HAVE INCREASED TOURISM AND IMPROV ED ECONOMIES ?, IMAP DATA INC. 2-8 (September 2001); see also TASTY AD, Top 20 Businesses
That Use Billboards (June 22, 2018), https://www.tastyad.com/top-businesses-that-use-
billboards/.
19 OUTFRONT COMMISSIONED STUDY WITH NINTH DECIMAL , POLK AUDIENCE MEASUREMENT
SOLUTIONS BY HIS MARKIT 2019.
20 Id.
21 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy, J.
ADVERTISING RESEARCH 150, 150 & 159.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 5
19314880.8
Outdoor advertising continues to be an economic catalyst for businesses and, with respect to
the business community in Gilroy, could result in millions of additional revenue, supporting more
jobs and higher wages.
III. Billboards support local economy through generation of sales tax revenue,
payment of billboard lease, and free advertising for city activities
For the City of Gilroy, the economic impact of outdoor advertising could be significant.
Sales tax represents the largest single source of General Fund revenue that the City receives,
representing 37% of the General Fund based on projections for the fiscal year 2023.22 The City
collected an average of $18.3 million in sales tax per year over the period of 2016-202 0. Of this,
approximately $6.4 million came from general retailers (outlet center, Newman Development, Regency Center, and Downtown Core), $3.3 million from automotive dealers, and $1.2 million
from service stations. In this same period, the City also collected transient occupancy tax (an
average of $1.35 million annually in the period of 2019-202 1) and motor vehicle tax (an average
of approximately $34,000 annually).23
The outlet center, auto dealers, and service stations are leading contributors to the City’s sales
tax revenues.24 As noted above, these businesses are also frequent billboard users due to their
reliance on directional and localized advertising and target audience of nonresident
consumers.25
In the previous section of this letter, we noted that local businesses could see increased sales by as much as 20%. Improvements in the health of local businesses translates into direct dollars
for the City. For instance, a 20% increase in local business revenue could result in the following
annual benefits:
• An increase of up to $1.28 million in the City’s sales tax revenue from retail stores;
• An increase of up to $658,000 in the City’s sales tax revenue from automotive
dealerships;
• An increase of up to $235,000 in the City’s sales tax revenue from service stations;
• An increase of up to $269,000 in the City's collected transient occupancy tax;
• An increase of up to $6,800 in the City's collected motor vehicle tax; and
22 CITY OF GILROY , ADOPTED BIENNIAL BUDGET at 37.
23 Id. at 47.
24 Id. at 254.
25 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy, JOURNAL OF ADVERTISING RESEARCH at 152-53; see, e.g., FLORIDA TAX WATCH, THE ECONOMIC
IMPACT OF FLORIDA ’S OUTDOOR ADVERTISING INDUSTRY F ROM A PRE- AND POST-SEPTEMBER 11,
2001 PERSPECTIVE at 3-4.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 6
19314880.8
• Overall, an increase in sales tax of $3.1 million (from all types of businesses in the City,
based on historical collections of $15.2 million in sales tax annually 26).
Even if outdoor advertising only increased revenue by 5%, City sales tax and other revenues
could, collectively, increase by $760,000. Such funds would be available for use in whatever
manner the City deemed appropriate, and could help finance public servant salaries, equipment,
or infrastructure.
CONCLUSION
Outdoor advertising plays a significant role in supporting local economies. By providing an
efficient and affordable platform for businesses to promote their products and services, outdoor
advertising drives consumer spending and stimulates economic growth. It is also an effective way for local governments and organizations to communicate important messages and
information to the public, promoting community engagement and involvement.
Very truly yours,
Jeff McCuen
Very truly yours,
Sean Marciniak
Hanson Bridgett LLP
CC
City of Gilroy Planning Commission
Andy Faber, City of Gilroy City Attorney
26 CITY OF GILROY , ADOPTED BIENNIAL BUDGET at 254 (This calculation excludes County and
State allocated tax revenue.)
Summary of Outfront Media’s Feb. 2, 2023 Submission to Gilroy
Planning Commission
As we suspected Outfront has asserted facts not in evidence and relied
on 20 year old studies.
Footnote 1: Newman Development and Regency Center, are out of
state real estate companies which presumably own some retail
businesses in Gilroy. I have no idea what Downtown Core is also
mentioned by Outfront. The claim being made by Outfront is that the
retails sales of these businesses would increase by as much as $16.7
million due to billboard advertising but how that figure is reached is not
explained nor is proof of causation, e.g. billboard advertising causes
increased sales.
Footnote 2: Supposedly showing that nationwide 70% of billboard
advertising is local. The source is Florida Tax Watch which is a Florida
non profit focusing on the Florida economy, state and local government
spending and taxes, etc. There is no further sourcing of the claim that
70% of advertising is local. Neither is local define. Does that include a
local McDonalds or other franchise operation? Florida Tax Watch is
described as follows by Wikipedia, "Despite claims of non-partisanship,
Florida TaxWatch policy positions have been described in the media as
consistent with conservative fiscal policy. As a business-backed policy
group, some of the watchdog groups' proposals have
generated controversy, including selling advertisements on state
government-owned road signs, eliminating the traditional pension plan
and deferred retirement options for public employees, and increasing
requirements for state-backed scholarship programs to reduce eligibility.
Wikipedia
link, https://en.wikipedia.org/wiki/Florida_TaxWatch#:~:text=Despite%20
claims%20of%20non%2Dpartisanship,consistent%20with%20conservat
ive%20fiscal%20policy.
Note that the assertion in the "Bay Area Market, local businesses have
accounted for 64% of the total billboard advertising market,” is not
sourced.
Footnote 3: Outfront in its letter asserts that Gilroy "generates most of its
sales tax revenue from industries that typically use billboards, such as
outlet centers, auto dealers, service stations, and the hospitality
industry.” The source for this is the Gilroy Budget. The budget and
references therein to sales tax received by the city has no demonstrated
association with any particular advertising option undertaken by
businesses paying sales taxes. Further more, industries aren’t
monolithic and their advertising choices are based on what each
business perceives as in its best interest given its ad budget, etc.
Footnote 4: Another assertion based on the Gilroy budget.
Footnote 5: Outfront states "businesses estimate that outdoor
advertising contributes up to 20% of the their sales, outdoor advertising
could add as much as $3.1 million in additional City’s sales tax per year,
in addition to increases in transient occupancy taxes.” Source: A study
in the Journal of Advertising Research entitled “Business Perceptions of
the Role of Billboards in the U.S. Economy". Tellingly, Outfront did not
indicate the date of the study though it is referenced numerous times. It
was conducted in 2003, twenty years ago! Needless to say, the universe
of advertising was different then from what it is now and the perceptions
of “Business” have undoubtedly changed.
Footnote 6, 7, 8 & 9: Assertions made are also sourced to the above
mentioned article. Is this the best Outfront can do in the way of
evidence?
Footnote: 10 & 11: Outfront presents costs to reach 1,000 people of
different media, only radio and some kinds of online advertising being
less expensive than billboards. TV cable and broadcast, magazines,
newspapers, podcasts and some online cost more. This might be a
good time to remind political decision makers why billboard advertising
is comparative less expensive. It is because the costs are externalized
to the community in at least two fundamental ways. One, the community
becomes a captive audience to unsolicited commercial messages for
which there is no off switch.
Two, the cost of the public right of way is paid by this captive audience
and the billboard industry in the form of user fees contributes nothing to
the maintenance of the right of way without which its billboards have no
value. No other ad media is so subsidized.
Footnote: 12, 13, 14: Pretty much irrelevant statistics with Footnote 14
again from the 20 year old article referenced earlier.
Footnote 15: Outfront claims that "states that ban billboards lag behind
other states in new business formations and in tourism spending.”
Another study from the past, this one from 2001. The title is misleading
as it is not about states it is basically about one state Vermont and its
share of U.S. travel expenditures between 1976 and 1996. The article
ignores Hawaii, Alaska, though it somewhat references Maine the 3
other states that ban billboards. The article also sharply criticizes Scenic
America for its alleged lack of statistical acumen. Unfortunately had this
article been written 5 or even 10 years ago and based on more recent
data it might be convincing but it is a 22 year old article based on data
that is 27 years old. Is this the best Outfront can do in the way of
evidence?
Footnote 16 & 17: More generalized and therefore hardly relevant
predictions of future income.
Footnote 18: In addition to the 2003 article cited, at this point in the
letter, Outfront sources a website called "Tasty Ad, the Billboard People”
which identifies the top 20 business sectors that use billboards which
includes everything imaginable in addition to churches and schools
which few would consider to be businesses. Kind of embarrassing to
offer this as “evidence.”
Footnote 19 & 20: Another claim that the automotive sector increases
sales when using billboards. The claim is based on a study funded by
Outfront but at least it wasn’t conducted 20 years ago.
Footnote 21: Another reference to the 2003 article.
Footnote 22, 23, 24: More relating of sales tax and other taxes coming
in to the city of Gilroy from the City of Gilroy Budget.
Footnote 25: Another reference to the 2003 article.
Footnote 26: More wishful projections of income based supposedly on
the city budget.
Attachment #1
“What Type of Advertising Influences Your Car Buying Decision?”
Source: Types of ads influencing car-buying decisions in the U.S. as of October 2012, Published
by Statista Research Department, Oct 24, 2012
https://www.statista.com/statistics/259115/types-of-ads-influencing-car-buying-decisions-in-the-us/
Attachment #2
Studies that Affirm the Findings of Statista Research
Attachment #3
“No Digital Billboards in San Jose, Video On What Products And Services Get Advertised On
Digital Billboards in the Bay Area,” https://www.youtube.com/watch?v=LEDF-WuhF1E
Attachment #4
“Outfront Media’s Letter to Gilroy Planning Commission,” Feb. 2, 2023.
Attachment #5
Analysis of References Used in Outfront Media’s Letter to Gilroy Planning Commission,” Feb. 2,
2023 by John Miller.
Attachment #6
“Timing Is Everything, Ensuring Meaningful CEQA Review by Avoiding Improper CEQA “Pre-
Commitment to a Project,” California Environmental Law Reporter, Vol. 2009, Issue #5.
Attachment #7
“A Chronological And Representative Listing Of Multiple Lawsuits Entered Into By Outfront Media
In Several States Over The Past 8 Years,” prepared by John Miller. It includes:
Exhibit A Outfront Media Sues City of San Jose
Exhibit B Ridgefield Park, NJ vs. Outfront Media
Exhibit C Manteca vs. Outfront Media See https://www.lawinsider.com/contracts/dboRrOjoxOr
Exhibit D Outfront Media vs. City of San Diego
Exhibit E Outfront Media vs. Lemaster, et al, Kentucky
Exhibit F Ellen Lee Zhou, et al. vs. Outfront Media (San Francisco)
Exhibit G Outfront Media vs. Royal Oak, Michigan
Exhibit H Outfront Media vs. City of Sandy Springs, Georgia
Exhibit I Potential Litigation between Crescent City, California vs. Outfront Media
Exhibit J Indiana Supreme Court Denies Outfront Media $237,000 in Attorneys Fees
Exhibit K River Ridge Dev. Corp. (Indiana) vs. Outfront Media
Exhibit L Outfront Media vs. Salt Lake City Corporation
Exhibit M Outfront Media vs. Mass Department of Transportation
“What Type of Advertising Influences Your Car Buying Decision?”
Source: Types of ads influencing car-buying decisions in the U.S. as of October 2012, Published
by Statista Research Department, Oct 24, 2012
https://www.statista.com/statistics/259115/types-of-ads-influencing-car-buying-decisions-in-the-us/
Attachment #2, “Studies that Affirm the Findings of the Statista Research.”
“No Digital Billboards in San Jose, Video On What Products And Services Get Advertised On
Digital Billboards in the Bay Area,” https://www.youtube.com/watch?v=LEDF-WuhF1E
19314880.8
February 2, 2023
VIA ELECTRONIC MAIL
City of Gilroy Planning Commission
Sharon Goei, Community Development Director
Cindy McCormick, Senior Planner
City of Gilroy
7351 Rosanna Street Gilroy, CA 95020
Re: Potential Benefits of Digital Billboards to the City of Gilroy’s Economy
Dear Ms. Goei and Ms. McCormick,
During the Planning Commission's January 19, 2023 public hearing on a proposed electronic
billboard ordinance, members of the Planning Commission and the public inquired about the
benefits of allowing digital billboards in the City. More simply, people asked, "Why should the
City consider doing this?"
By this letter, we would like to answer this question.
Individual billboards would be subject to a development agreement between the City and a sign
owner, which is a contractual arrangement that would provide the City with certain direct
benefits, such as free municipal advertising time and a revenue share. However, there are more
significant, indirect benefits that the City and its business community would experience from
allowing digital signage.
Billboards have been a fixture of the advertising landscape for decades, providing businesses
with a cost-effective way to reach a wide audience. As an advertising tool for businesses of all sizes, billboards provide a significant contribution to the economic health of local governments.
Billboards do so by increasing the visibility of mom-and-pop businesses; increasing sales for
larger, formula retail stores; and promoting local involvement (i.e., advertising civic and
municipal events to attract people to the City to spend money on local businesses). Outdoor
advertising thereby increases profits for local businesses and sales tax revenue for local governments.
For the City of Gilroy, a modest allowance for digital, outdoor advertising would offer the
following potential economic benefits:
• An enhancement of commercial sales in City businesses, including without limitation its
retail shopping outlets, Newman Development, Regency Center, and Downtown Core,
by $4.1 million to $16.7 million (representing a conservative range of 5 to 20%).1
• An increase in City sales and other tax revenues by $760,000 and $3.1 million
(representing a conservative range of 5 to 20%), which could fund a variety of public
1 The potential upside is a 25% increase in sales, although we chose to present a more
conservative figure of 20% increase.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 2
19314880.8
programs, such as salary increases for police, fire, and other city workers, or
improvements in public infrastructure and equipment.
The availability of outdoor advertising would support Gilroy's local businesses. While it is
uncertain what percentage of advertising sign would be utilized by local businesses, nationwide
statistics have shown that local business represent approximately 70% of advertising industry
revenues.2 In the San Francisco Bay Area Market, local businesses have accounted for 64% of
the total billboard advertising market.
Meanwhile, the City's economy is well-positioned to benefit from outdoor advertising, even in a
limited amount. The City generates most of its sales tax revenue from industries that typically
use billboards, such as outlet centers, auto dealers, service stations, and the hospitality
industry.3 Together, these businesses contribute $15.2 million to the City’s annual sales tax revenue of $18.3 million, and approximately $1.35 million in transient occupancy taxes
annually.4 Since businesses estimate that outdoor advertising contributes up to 20% of the their
sales, outdoor advertising could add as much as $3.1 million in additional City’s sales tax per
year, in addition to increases in transient occupancy taxes.5
This letter analyzes the ways in which outdoor advertising supports local businesses and
formula retail businesses (e.g., stores populating outlets) by expanding their customer base and
revenues. This letter also evaluates the significance of outdoor advertising’s contribution to local
economies, including the City’s economic well-being.
I. Outdoor Advertising is beneficial to small and local businesses
For local businesses, billboards have the following benefits in that they:
• help to communicate with and attract new customers;
• allow efficient targeting of consumers in a given trade area; and
• are cost-effective compared to other traditional media.
Furthermore, the size and placement flexibility of billboards allow them to serve a function that is
different from a business’ on premise signage. Small and local businesses, travel-related
businesses such as hotels, restaurants, gas stations, and businesses related to entertainment
and tourism are more reliant on billboards than other types of businesses due to the need to
2 FLORIDA TAX WATCH, T HE ECONOMIC IMPACT OF F LORIDA ’S OUTDOOR ADVERTISING INDUSTRY
FROM A PRE- AND POST-SEPTEMBER 11, 2001 PERSPECTIVE at 3 (data from national surveys).
3 CITY OF GILROY , ADOPTED BIENNIAL BUDGET 254 (adopted June 7, 2021),
https://www.cityofgilroy.org/DocumentCenter/View/12223/Fiscal-Year-2022-and -2023-Adopted -
Budget.
4 Id.
5 Id.; Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH 150, 150 & 159.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 3
19314880.8
direct motorists to their location or convince them of the benefits of the business as they pass
by.6
Given this pattern, businesses do not generally see other media as cost-effective substitutes for
billboards. Flyers can be locally targeted but have limited potential for effective reach.7 Other
local media, such as newspapers, radio, and television, involve both higher cost per thousand
exposures and waste circulation.8 Additionally, production costs associated with developing
billboards are generally substantially lower than traditional media such as magazines, radio, and
television.9 Online and email advertisements can be effective, but often end up in spam folders.
On average, it costs $7.50 to reach 1,000 people with digital place-based media.10 Compared to
other media sources, it costs approximately $6.75 for radio, $23.33 for podcasts, $13.24 for
magazines, $46.82 for newspaper, $20 for broadcasting TV, $12 for cable TV, and $2.21 - $10.47 for online advertising per 1,000 people.11
Across industries, local and small businesses represent about 77% of advertisers, and 92% of
them (about 70% of all billboard advertisers) have less than 50 employees.12 Local businesses,
meanwhile, represent approximately 70% of outdoor advertising industry revenues.13 Data also
confirms that businesses electing to use outdoor advertising are repeat customers, finding value
in this median. For instance, the median user has been in business for between 11 and 25
years and has been using billboards within the same 11-25 year range.14 In fact, historical
evidence shows that states banning billboards lag behind other states in new business
formations and in tourism spending.15
With respect to the City of Gilroy, outdoor advertising could increase revenue for local retail
stores and the hospitality industry within the City, whi ch in turn are important to the vitality of the
City’s economic health. As noted above, hotels, restaurants, gas stations, and businesses
6 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH at 152 -53; see, e.g., FLORIDA TAX WATCH, THE
ECONOMIC IMPACT OF FLORIDA’S OUTDOOR ADVERTISING INDUSTRY FROM A PRE-
AND POST -SEPTEMBER 11, 2001 PERSPECTIVE a t 3-4 & fns. 3-5 (February 2002) (showing
similar data from multiple national surveys).
7 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH at 159.
8 Id. at 159.
9 Id.
10 Soloman Partners, Media CPM Comparisons (January 2022); Outfront Media data.
11 Soloman Partners, Media CPM Comparisons (January 2022); Outfront Media data.
12 FLORIDA T AX WATCH, THE ECONOMIC IMPACT OF FLORIDA ’S OUTDOOR ADVERTISING INDUSTRY
FROM A PRE- AND POST-SEPTEMBER 11, 2001 PERSPECTIVE at 3 (data from national surveys).
13 Id.
14 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy,
JOURNAL OF ADVERTISING RESEARCH at 154.
15 WILLIAM LILLEY III, LAURENCE J. DEFRANCO, AND CLARENCE W. BUFFALO, AN ANALYTICAL
INQUIRY : DO STATES THAT BAN BILLBOARDS HAVE INCREASED TOURISM AND IMPROV ED
ECONOMIES ?, IMAP DATA INC. 3 (September 2001).
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 4
19314880.8
related to entertainment and tourism are prime beneficiaries of outdoor advertising, which could
boost sales by up to 20%.16 In the City of Gilroy, there are at least 17 hotels, 89 restaurants,
and 19 gas stations, and many other hospitality business. We understand these businesses especially thrive during City events such as the Gilroy Garlic festival, Garlic City Car Show, and
Gilroy Farmers’ Market.17
II. Outdoor advertising could result in millions of dollars in increased profits for
Gilroy businesses
Outdoor advertising has a positive impact on all businesses — not only local, mom-and-pop
stores, but formula retail outlet stores and automotive dealerships.18
By way of example, in 2019, Outfront Media commissioned a study on the effect of outdoor advertising on the automotive industry. This study found that use of outdoor advertising can
boost sales in the automotive industry, with exposure to outdoor ads resulting in a 17% increase
in the likelihood of purchasing a new vehicle.19 Outdoor advertising can also indirectly drive
consumer action. Among those consumers viewing an automotive advertisement on an outdoor
advertising display, 43% engaged with the ad by ways of subsequently visiting a website,
conducting research online, or sharing information by words of mouth. Approximately 20%
followed the dealer or brand on social media.20
In other industries, it is estimated that outdoor advertising can increase a businesses’ total sales
by as much as 20%.21
For Gilroy, businesses within the City could potentially see increased sales as follows:
• Auto sales, which currently generate approximately $36.2 million in revenue per year,
could see an increase of $1.8 million to $7.2 million (representing a conservative range
of 5 to 20%).
• Other City businesses, which currently generate approximately $47.4 million in revenues
per year, could see an increase of $2.3 million to $9.5 million (representing a
conservative range of 5 to 20%).
16 Id. at 150 & 159.
17 For more information, visit https://visitgilroy.com/restaurants/.
18 WILLIAM LILLEY III, LAURENCE J. DEFRANCO, AND CLARENCE W. BUFFALO, AN ANALYTICAL
INQUIRY : DO STATES THAT BAN BILLBOARDS HAVE INCREASED TOURISM AND IMPROV ED ECONOMIES ?, IMAP DATA INC. 2-8 (September 2001); see also TASTY AD, Top 20 Businesses
That Use Billboards (June 22, 2018), https://www.tastyad.com/top-businesses-that-use-
billboards/.
19 OUTFRONT COMMISSIONED STUDY WITH NINTH DECIMAL , POLK AUDIENCE MEASUREMENT
SOLUTIONS BY HIS MARKIT 2019.
20 Id.
21 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy, J.
ADVERTISING RESEARCH 150, 150 & 159.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 5
19314880.8
Outdoor advertising continues to be an economic catalyst for businesses and, with respect to
the business community in Gilroy, could result in millions of additional revenue, supporting more
jobs and higher wages.
III. Billboards support local economy through generation of sales tax revenue,
payment of billboard lease, and free advertising for city activities
For the City of Gilroy, the economic impact of outdoor advertising could be significant.
Sales tax represents the largest single source of General Fund revenue that the City receives,
representing 37% of the General Fund based on projections for the fiscal year 2023.22 The City
collected an average of $18.3 million in sales tax per year over the period of 2016-202 0. Of this,
approximately $6.4 million came from general retailers (outlet center, Newman Development, Regency Center, and Downtown Core), $3.3 million from automotive dealers, and $1.2 million
from service stations. In this same period, the City also collected transient occupancy tax (an
average of $1.35 million annually in the period of 2019-202 1) and motor vehicle tax (an average
of approximately $34,000 annually).23
The outlet center, auto dealers, and service stations are leading contributors to the City’s sales
tax revenues.24 As noted above, these businesses are also frequent billboard users due to their
reliance on directional and localized advertising and target audience of nonresident
consumers.25
In the previous section of this letter, we noted that local businesses could see increased sales by as much as 20%. Improvements in the health of local businesses translates into direct dollars
for the City. For instance, a 20% increase in local business revenue could result in the following
annual benefits:
• An increase of up to $1.28 million in the City’s sales tax revenue from retail stores;
• An increase of up to $658,000 in the City’s sales tax revenue from automotive
dealerships;
• An increase of up to $235,000 in the City’s sales tax revenue from service stations;
• An increase of up to $269,000 in the City's collected transient occupancy tax;
• An increase of up to $6,800 in the City's collected motor vehicle tax; and
22 CITY OF GILROY , ADOPTED BIENNIAL BUDGET at 37.
23 Id. at 47.
24 Id. at 254.
25 Charles R. Taylor, Business Perceptions of the Role of Billboards in the U.S. Economy, JOURNAL OF ADVERTISING RESEARCH at 152-53; see, e.g., FLORIDA TAX WATCH, THE ECONOMIC
IMPACT OF FLORIDA ’S OUTDOOR ADVERTISING INDUSTRY F ROM A PRE- AND POST-SEPTEMBER 11,
2001 PERSPECTIVE at 3-4.
Mr. Andrew Faber
Ms. Jolie Houston
February 2, 2023
Page 6
19314880.8
• Overall, an increase in sales tax of $3.1 million (from all types of businesses in the City,
based on historical collections of $15.2 million in sales tax annually 26).
Even if outdoor advertising only increased revenue by 5%, City sales tax and other revenues
could, collectively, increase by $760,000. Such funds would be available for use in whatever
manner the City deemed appropriate, and could help finance public servant salaries, equipment,
or infrastructure.
CONCLUSION
Outdoor advertising plays a significant role in supporting local economies. By providing an
efficient and affordable platform for businesses to promote their products and services, outdoor
advertising drives consumer spending and stimulates economic growth. It is also an effective way for local governments and organizations to communicate important messages and
information to the public, promoting community engagement and involvement.
Very truly yours,
Jeff McCuen
Very truly yours,
Sean Marciniak
Hanson Bridgett LLP
CC
City of Gilroy Planning Commission
Andy Faber, City of Gilroy City Attorney
26 CITY OF GILROY , ADOPTED BIENNIAL BUDGET at 254 (This calculation excludes County and
State allocated tax revenue.)
Summary of Outfront Media’s Feb. 2, 2023 Submission to Gilroy
Planning Commission
As we suspected Outfront has asserted facts not in evidence and relied
on 20 year old studies.
Footnote 1: Newman Development and Regency Center, are out of
state real estate companies which presumably own some retail
businesses in Gilroy. I have no idea what Downtown Core is also
mentioned by Outfront. The claim being made by Outfront is that the
retails sales of these businesses would increase by as much as $16.7
million due to billboard advertising but how that figure is reached is not
explained nor is proof of causation, e.g. billboard advertising causes
increased sales.
Footnote 2: Supposedly showing that nationwide 70% of billboard
advertising is local. The source is Florida Tax Watch which is a Florida
non profit focusing on the Florida economy, state and local government
spending and taxes, etc. There is no further sourcing of the claim that
70% of advertising is local. Neither is local define. Does that include a
local McDonalds or other franchise operation? Florida Tax Watch is
described as follows by Wikipedia, "Despite claims of non-partisanship,
Florida TaxWatch policy positions have been described in the media as
consistent with conservative fiscal policy. As a business-backed policy
group, some of the watchdog groups' proposals have
generated controversy, including selling advertisements on state
government-owned road signs, eliminating the traditional pension plan
and deferred retirement options for public employees, and increasing
requirements for state-backed scholarship programs to reduce eligibility.
Wikipedia
link, https://en.wikipedia.org/wiki/Florida_TaxWatch#:~:text=Despite%20
claims%20of%20non%2Dpartisanship,consistent%20with%20conservat
ive%20fiscal%20policy.
Note that the assertion in the "Bay Area Market, local businesses have
accounted for 64% of the total billboard advertising market,” is not
sourced.
Footnote 3: Outfront in its letter asserts that Gilroy "generates most of its
sales tax revenue from industries that typically use billboards, such as
outlet centers, auto dealers, service stations, and the hospitality
industry.” The source for this is the Gilroy Budget. The budget and
references therein to sales tax received by the city has no demonstrated
association with any particular advertising option undertaken by
businesses paying sales taxes. Further more, industries aren’t
monolithic and their advertising choices are based on what each
business perceives as in its best interest given its ad budget, etc.
Footnote 4: Another assertion based on the Gilroy budget.
Footnote 5: Outfront states "businesses estimate that outdoor
advertising contributes up to 20% of the their sales, outdoor advertising
could add as much as $3.1 million in additional City’s sales tax per year,
in addition to increases in transient occupancy taxes.” Source: A study
in the Journal of Advertising Research entitled “Business Perceptions of
the Role of Billboards in the U.S. Economy". Tellingly, Outfront did not
indicate the date of the study though it is referenced numerous times. It
was conducted in 2003, twenty years ago! Needless to say, the universe
of advertising was different then from what it is now and the perceptions
of “Business” have undoubtedly changed.
Footnote 6, 7, 8 & 9: Assertions made are also sourced to the above
mentioned article. Is this the best Outfront can do in the way of
evidence?
Footnote: 10 & 11: Outfront presents costs to reach 1,000 people of
different media, only radio and some kinds of online advertising being
less expensive than billboards. TV cable and broadcast, magazines,
newspapers, podcasts and some online cost more. This might be a
good time to remind political decision makers why billboard advertising
is comparative less expensive. It is because the costs are externalized
to the community in at least two fundamental ways. One, the community
becomes a captive audience to unsolicited commercial messages for
which there is no off switch.
Two, the cost of the public right of way is paid by this captive audience
and the billboard industry in the form of user fees contributes nothing to
the maintenance of the right of way without which its billboards have no
value. No other ad media is so subsidized.
Footnote: 12, 13, 14: Pretty much irrelevant statistics with Footnote 14
again from the 20 year old article referenced earlier.
Footnote 15: Outfront claims that "states that ban billboards lag behind
other states in new business formations and in tourism spending.”
Another study from the past, this one from 2001. The title is misleading
as it is not about states it is basically about one state Vermont and its
share of U.S. travel expenditures between 1976 and 1996. The article
ignores Hawaii, Alaska, though it somewhat references Maine the 3
other states that ban billboards. The article also sharply criticizes Scenic
America for its alleged lack of statistical acumen. Unfortunately had this
article been written 5 or even 10 years ago and based on more recent
data it might be convincing but it is a 22 year old article based on data
that is 27 years old. Is this the best Outfront can do in the way of
evidence?
Footnote 16 & 17: More generalized and therefore hardly relevant
predictions of future income.
Footnote 18: In addition to the 2003 article cited, at this point in the
letter, Outfront sources a website called "Tasty Ad, the Billboard People”
which identifies the top 20 business sectors that use billboards which
includes everything imaginable in addition to churches and schools
which few would consider to be businesses. Kind of embarrassing to
offer this as “evidence.”
Footnote 19 & 20: Another claim that the automotive sector increases
sales when using billboards. The claim is based on a study funded by
Outfront but at least it wasn’t conducted 20 years ago.
Footnote 21: Another reference to the 2003 article.
Footnote 22, 23, 24: More relating of sales tax and other taxes coming
in to the city of Gilroy from the City of Gilroy Budget.
Footnote 25: Another reference to the 2003 article.
Footnote 26: More wishful projections of income based supposedly on
the city budget.
3/10/23, 8:57 AM San Jose gets sued for ignoring its billboard rules - San José Spotlight
https://sanjosespotlight.com/san-jose-gets-sued-for-ignoring-its-billboard-rules/1/3
An Outfront Media billboard along El Camino Real in Santa Clara on Thursday, Aug. 11, 2022. Photo by Joseph Geha.
A billboard advertising giant is suing San Jose over a decision to allow a competitor to erect two digital billboards on airport property.
San Jose gets sued for ignoring its billboard rules
by Joseph Geha August 12, 2022
3/10/23, 8:57 AM San Jose gets sued for ignoring its billboard rules - San José Spotlight
https://sanjosespotlight.com/san-jose-gets-sued-for-ignoring-its-billboard-rules/2/3
Outfront Media alleges in its lawsuit led last month that the San Jose City Council “abused their discretion” and violated city policies by authorizing
billboards from Clear Channel Outdoor, according to court lings. The city should have held a competitive process to collect bids for billboards from
other vendors, including Outfront, the lawsuit says.
An attorney for Outfront Media did not respond to requests for comment, nor did a spokesperson for Clear Channel.
The lawsuit adds another chapter to a long debate over whether the city should allow new billboards on public land, following the council’s landmark
decision in 2018 to lift a nearly 50-year ban on such advertisements. The council made history with a decision earlier this year to amend an airport
master plan and authorize Clear Channel to install two 1,000-square-foot digital billboards south of Highway 101 at Mineta San Jose International
Airport.
A Clear Channel Outdoor billboard at the corner of Stockton Avenue and The Alameda in San Jose near the SAP Center on
Aug. 11, 2022. Photo by Joseph Geha.
3/10/23, 8:57 AM San Jose gets sued for ignoring its billboard rules - San José Spotlight
https://sanjosespotlight.com/san-jose-gets-sued-for-ignoring-its-billboard-rules/3/3
The city hammered out a deal with Clear Channel in real time at the Feb. 15 meeting, negotiating with the company to pull down a dozen older, paper
billboards around the city in exchange for the two digital ones.
City staff said the agreement could be authorized under San Jose’s longstanding airport advertising contract with Clear Channel, in place since 2007.
But Outfront contends the agreement “expressly prohibits (Clear Channel) from installing or operating freestanding outdoor billboards anywhere at
the airport,” according to its lawsuit. Outfront representatives told of cials at numerous meetings there should be a bidding process for the billboards,
but they were rebuffed.
The lawsuit also says the city’s policy on billboards, which it updated to allow new ones, speci cally calls out the need for a competitive bidding process
and the city “acted arbitrarily and capriciously by disregarding” its own requirement.
The city council’s approval of the deal with Clear Channel went against the San Jose Airport Commission recommendation, which twice rejected the
idea. Commissioners cited a variety of concerns about the billboards, including questions over whether the city’s contract with Clear Channel would
legally allow for the deal.
“We really felt that it was a stretch to take the existing contract and allow that contract to extend to outdoor billboards, especially when the initial
contract speci cally prohibited that,” Airport Commission Chair Dan Connolly told San José Spotlight. “I expected the lawsuit to be led because I don’t
think we did what we should have done. The city should have gone out to a competitive bidding process.”
City Attorney Nora Frimann, airport spokesperson Scott Wintner and economic development department spokesperson Elisabeth Handler all declined
to comment due to the litigation.
In 2018 when the city was putting a plan in motion to undo the longstanding billboards ban, Connolly felt the city didn’t engage as much with the
public as it should have. He said the city needs to be more transparent in its processes overall.
“The challenge we have many times in government is we nd out about things way too late. Some of that I believe is by design. They want to keep it
under wraps until the last minute so people don’t have the opportunity,” he said.
John Miller, a founding member of No Digital Billboards in San Jose—which has helped lead the ght against any new billboards in the city and refers
to the signs as “parasites” on its website—said he isn’t surprised by the lawsuit.
“We remind the city that we told you so,” Miller told San José Spotlight. “We’d warned the city council that once you open the door to the billboard
industry, you’re going to get lawsuits, because the industry sort of looks upon legal action as a cost of doing business.”
Contact Joseph Geha at joseph@sanjosespotlight.com or @ josephgeha16 on Twitter.
Home / Blog / Village of Ridge eld Park v. Outfront Media, LLC and Planning/Zoning Board of the Borough of Bogota
The Superior Court of New Jersey’s Appellate Division recently upheld a board decision to approve the settlement of an application for a conditional use variance and nal
site plan approval to install a billboard on property along a highway.
In Village of Ridge eld Park v. Outfront Media, LLC and Planning/Zoning Board of the Borough of Bogota, No. A-1135-20 (App. Div. Oct. 7, 2022), the village of Ridge eld Park in
Bergen County, New Jersey challenged a decision by the Bogota Joint Zoning and Planning Board (“Board”) to approve an amended application by Outfront Media to
install a free-standing, static billboard featuring a non-digital advertisement on an empty grass area near Interstate 80. The Appellate Division af rmed the Law Division’s
order to approve the billboard, nding that the advertising company met its burden of proof to satisfy a section (d)(3) conditional use variance, as laid out in Coventry
Square, Inc. v. Westwood Zoning Bd. of Adjustment, 138 N.J. 285, 300-01 (1994).
Outfront Media initially submitted an application for a Billboard that was ultimately denied by the joint Board, nding that the application required four variances.
Outfront led a complaint in lieu of prerogative writ, challenging the Board’s decision. The Appellate Division reversed the Board’s decision and vacated the matter back to
the Board, nding that the Board had failed to adequately explain its conclusions; speci cally, that the Board’s decision was “conclusory in nature and untied to any of its
factual ndings.” On remand, the Board approved a settlement agreement with Outfront based on a revised application, which changed various aspects of the billboard
plan.
Village of Ridge eld Park v. Outfront Media, LLC andPlanning/Zoning Board of the Borough of Bogota
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Ridge eld Park opposed the settlement and led a complaint in lieu of prerogative writ, arguing that the Board improperly “changed” the interpretation of a Zoning
ordinance it applied to the rst Outfront application, citing res judicata and collateral estoppel. The lower court found that the Board was not bound by its prior
interpretation of the zoning ordinance or fact ndings.
The Appellate Division af rmed the lower court’s well-reasoned opinion, adding additional comments relating to the concepts of res judicata and collateral estoppel. “The
application of res judicata doctrine requires substantially similar or identical causes of action and issues, parties, and relief sought.” Culver v. Ins. Co. of N. Am., 115 N.J.
451, 460 (1989). “As a general principle, [c]ollateral estoppel is that branch of . . . res judicata which bars relitigation of any issue which was actually determined in a prior
action . . . .” In re Liquidation of Integrity Ins. Co., 214 N.J. 51, 66 (2013) (quoting Div. of Youth & Fam. Servs. v. R.D., 207 N.J. 88, 114 (2011)).
Since the Board’s rst resolution was vacated by the Appellate Division and remanded for the Board to reopen the hearing and consider additional evidence, the Board
was not bound by its prior interpretation. Thus, the settlement agreement with Outfront was upheld.
By Stuart Lieberman | Published October 20, 2022 (2017-02-15T09:00:32+0000) | Posted in Land Use, Planning, Zoning | Tagged Can you re ll a planning board
application, Land use and res judicata, Res judicata and planning boards, Res judicata and zoning board
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Case No.: 19cv2236 JM(BGS)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
Outfront Media, LLC v.City of San Diego
Decided Jun 1, 2021
< 19cv2236 JM(BGS)
06-01-2021
OUTFRONT MEDIA, LLC, Plaintiff, v. THE
CITY OF SAN DIEGO, et al., Defendants.
Hon. Jeffrey T. Miller United States District Judge
ORDER REGARDING CROSS-MOTIONS
FOR SUMMARY JUDGMENT
Hon. Jeffrey T. Miller United States District Judge
Presently before the court are Outfront Media,
LLC's (“Outfront”) Motion for Partial Summary
Judgment (Doc. No. 30) and Defendants' Cross
Motions for Summary Judgment or in the
Alternative, Summary Adjudication of Issues
(Doc. Nos. 31, 32, 33). The motions have been
fully briefed and the court finds them suitable for
determination on the papers submitted and without
oral argument in accordance with Civil Local Rule
7.1(d)(1). For the reasons set forth below,
Outfront's motion is denied, and Defendants'
motions are granted-in-part.
I. BACKGROUND
A. Undisputed Facts
The dispute concerns whether a billboard
previously located at 1473 F Street, San Diego,
California, was inversely condemned because the
property on which it was located was purchased as
part of a redevelopment plan to build the East
Village Green Park.
In 1957, Outfront's predecessor in interest began a
five-year lease for a portion of 1473 F Street for
the purpose of constructing and maintaining a
billboard. (Doc. No. 30-2, Declaration of Katie
Metz, ¶ 4.) The original lease allowed for renewal
for additional five-year terms, unless otherwise
terminated. (Id.) In 1967, Outfront's predecessor in
interest entered into a new ten-year lease, with
additional one-year terms to follow, unless
otherwise terminated. (Id.) Subsequently, in 1980
and 1983, the lease regarding the billboard was
renegotiated. (Id.)
The lease governing this dispute dates back to
1985 and was between Gannett Outdoor Co., Inc.
and the property owner. (Doc. No. 30-2 at 6 ; Doc.
No. 36-3). The lease was for a five-year term at
$900 a year, with the rent increasing to $1, 200 per
year after eighteen months. (Id.) The lease would
renew for:
1
2
1 Gannett Outdoor is one of the previous
name iterations Outfront has used. (See,
e.g., Doc. No. 36-4 at 9-10.) Outfront was
also previously known as Viacom and CBS
Outdoor. (Id. at 10.)
2 Document numbers and page references
are to those assigned by CM/ECF for the
docket entry.
1
Id. at ¶ 4. The lease provides that it is binding
upon the heirs, assigns and successors of both the
lessor and lessee. (Id. at ¶ 9.)
Doc. No. 30-2 at 8; Doc. No. 31-7 at 2; Doc. No.
33-4 at 7; Doc. No. 36-6 at 2.
subsequent successive terms unless
terminated at the end of such term or any
successive term upon written notice by the
Lessor or Lessee served by certified or
registered mail thirty (30) days before the
end of such term or subsequent like term,
provided that Lessee shall have the right to
terminate the Lease at the end of any
monthly period upon written notice to
Lessor served not less than thirty (30) days
prior to the end of such monthly period.
Lessor shall have the right to terminate the
Lease at any time during the period of this
Lease if the Lessor is to improve the
unimproved property by erecting thereon a
permanent private commercial or
residential building. Lessee shall remove
its signs within thirty (30) days after
receipt of a copy of the applicable building
permits, but only if in addition it has been
paid in full at the time notice of building is
given the consideration described in the
sentence which follows immediately. The
Lessor will upon giving such notice of
building, return to the Lessee all rent paid
for the unexpired term…. If any portions
of the property are not to be utilized for
such building, the Lessee has the option to
use the remaining portion on the same
terms, except that the rent shall be
proportionally reduced.
On October 18, 2005, Viacom Outdoor signed an
addendum to the lease (# 80531) which provides:
As of November 16, 2005, this lease shall
automatically renew for month to month
like terms. The Lessor shall have the right
to terminate this Lease at any time during
the term. Tenant shall have thirty days
from the day notice was given to remove
said structure.
In addition … rent shall be Two thousand
four hundred dollars ($2, 400) per year…
All other terms of this Lease shall remain
the same.
The parties further agree that this
Addendum shall supersede any contrary or
conflicting provisions of the Lease.
Title to 1473 F Street transferred several times
throughout the years. The contractual relationship
on the 1985 lease was between Garnett Outdoor
Co., Inc., and Kim M. Wilson, an individual.
(Doc. No. 30-2 at 6; Doc. No. 36-4 at 12).
However, the Addendum was signed by Jerome's
Furniture Warehouse/Navarra Properties and
Viacom Outdoor (Doc. No. 30-2 at 8; Doc. No.
33-4 at 61; Doc. No. 36-4 at 19; Doc. No. 36-5).
On February 1, 2010, the Center City
Development Corporation (“CCDC”), on behalf of
the Redevelopment Agency of the City of San
Diego (“Agency”), sent a letter to Navarra
Properties proposing the acquisition of 1473 F
Street for a public project. (Doc. No. 30-3 at 41-
68; Doc. No. 31-8 at 2-18; Doc. No. 33-5 at 167-
194.) The letter discloses that the offer to purchase
was a conditional one needing approval of the
Agency, and that “while CCDC staff proposes to
recommend the acquisition of the [Property] to the
Agency for this project, no decision to acquire can
be made until the Agency formally acts to approve
this acquisition.” (Id. at 41; 2; 167.) The letter also
informs that 1473 F Street is located within the
project area proposed for future use as East
Village public park. (Id.) Included with the letter
were four disclosures: (1) California Government
Code 7267.2(a) - Offer to Purchase; (2) Statement
and Summary of the Basis for Just Compensation;
(3) Summary Statement Accompanying
Government Code 7267.2(a); and (4) Contract of
Acquisition. (Doc. No. 30-1 at 45-68; Doc. No.
31-8 at 7-13; Doc. No. 33-5 at 171-194.)
2
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
(Id. at 70; 154; 2.) Included with the letter were
four disclosures: (1) Parcel Legal Description; (2)
Statement and Summary of the Basis for Just
Compensation; (3) Attachment Relating to
Appraisal of Improvements Pertaining to the
Realty; and (4) Summary Statement
Accompanying Government Code 7267.2(a).
(Doc. No. 30-3 at 73- 81; Doc. No. 36-7 at 5-13.)
That same day, the CCDC sent a letter to CBS
Outdoor on behalf of the Agency, informing CBS
Outdoor that it was proposing the Agency acquire
1473 F Street for proposed future use as East
Village public park. (Doc. No. 30-3 at 70-81; Doc.
No. 33-5 at 154-165; Doc. No. 36-7 at 2-17.) The
letter stated that although CBS Outdoor was not
the property owner, it may have an interest in
1473 F Street as a tenant/business operator and
was being provided with information regarding the
proposed acquisition because of “the
improvements pertaining to realty - the billboard”
located on the property. (Id. at 70; 154; 2.) The
purpose of the letter was to convey the Agency's
offer to purchase the billboard for $12, 160 so that
the “Agency may initiate negotiations regarding
the proposed acquisition of the Parcel.” (Id. at 71,
76; 155, 161; 3, 8.) The letter included the
following disclosure:
[w]hile CCDC staff proposes to
recommend the acquisition of the
[Property] to the Agency for this project,
no decision to acquire can be made until
the Agency formally acts to approve this
acquisition. Nothing in this letter is meant
to pre-commit the Agency or otherwise
limit the options available to the Agency.
Consequently this offer, if accepted, and
the acquisition of the [Property] is
conditional upon and requires the approval
of the Agency.
On April 22, 2010, Daley & Heft, LLP sent a
letter to CBS Outdoor on behalf of the CCDC
following up on the February 1, 2010 offer to
acquire the billboard located at 1473 F Street.
(Doc. No. 33-5 at 196-197.) On April 28, 2010,
Daley & Heft, LLP sent a follow up letter to CBS
Outdoor to confirm that “[t]his morning you
advised that CBS Outdoor is rejecting the offer
made by CCDC in the amount of Twelve
Thousand One Hundred Sixty Dollars ($12, 160).
I will advise CCDC of CBS's position, as well as
your proposal to settle, which, if I understand it
correctly, CBS is willing to relocate the billboard
if the City of San Diego provides a permit to
relocate said structure.” (Id. at 199-200.)
On August 23, 2010, Navarra Properties AJ2, L.P.,
and the Agency entered into an agreement to sell
1473 F Street for $2, 449, 882. (Doc. Nos. 30-3 at
88-109; Doc. No. 33-5 at 213-223; Doc. No. 34-7
at 2-13; Doc. No. 35-7 at 2-13; Doc. No. 37-16 at
2-28; Doc. No. 38-8 at 2-13.) A paragraph in the
agreement contains the following sentence:
“Buyer and Seller acknowledge that the sale of the
Property is under the threat of eminent domain.”
(Id. at ¶ 16.)
The sale of 1473 F Street occurred, and the grant
deed was duly registered with the San Diego
Recorder's Office. (Doc. No. 30-3 at 111; Doc.
No. 31-9 at 2-4; Doc No. 33-5 at 202-04; Doc. No.
36-8 at 2-4; Doc. No. 37-14 at 2-4.) Upon the sale
of 1473 F Street, Navarra Properties and the
Agency entered into a one-year leaseback
agreement, with Navarra now being the tenant of
1473 F Street. (Doc. No. 30-3 at 98-109; Doc. No.
33-5 at 226-239; Doc. No. 34-7 at 14-28; Doc. No.
35-7 at 14-28; Doc. No. 38-8 at 14-28).
Following the purchase of the property, the
Agency was dissolved as of February 1, 2012.
(Doc. No. 30-3 at 11-12; Doc. No. 31-11 at 4;
Doc. No. 31-11 at 2.) On January 12, 2012, as a
result of the passage of California State assembly
bill AB 26, the San Diego City Council passed a
resolution designating the City of San Diego as
the successor agency to the Agency and electing to
retain the Agency's housing assets and assume the
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Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
Agency's housing responsibilities. (Doc. No. 31-
10 at 2-5; Doc. No. 33-5 at 12-15; Doc. No. 36-9
at 2-5; Doc. No. 37-8 at 2-5.)
On June 27, 2012, Civic San Diego (“Civic”) filed
restated articles of reincorporation. (Doc. No. 33-
5, 8-10; Doc. No. 37-7 at 2-4). The articles
provide that the nonprofit corporation was
formerly known as CCDC. (Id. at 8; 2.) According
to Article II C, one of the non-profit's purposes is
to: “(i) engage in economic development, land use
permitting and project management services
which under California law can be done by
contract with or delegated by the City of San
Diego (“City”), or the City solely in its capacity as
the designated successor agency to the
Redevelopment Agency to the City of San Diego
(“Successor Agency”).” (Id.)
On June 28, 2012, the San Diego City Council
passed a resolution approving the newly
reorganized CCDC and its name change to Civic.
(Doc. No. 31-11 at 2-11; Doc. No. 33-5 at 62-65;
Doc. No. 37-10 at 2-5.) That same day, the City
Council passed a resolution authorizing the
execution of a four-year agreement for consulting
services between City as successor agency and
Civic for housing successor agency services. (Doc.
No. 33-5 at 105-107; Doc. No. 37-12 at 2-4.)
Specifically, the resolution stated: “the Mayor had
determined [that] in order to wind down the
[Agency]'s operations in an orderly manner, the
City will require the unique professional services
and particular professional expertise of Civic San
Diego, a California nonprofit public benefit
corporation, formerly known as Center City
Development Corporation, Inc.” (Id. at 107; 3.)
The consulting agreement was duly executed.
(Doc. No. 33-5 at 67-103.)
On January 15, 2013, Civic sent notice to CBS
Outdoor, providing it with thirty (30)-days to
remove its billboard from 1473 F Street. (Doc. No.
35-4 at 2; Doc. No. 38-5 at 2.) The letter informs
CBS Outdoor that 1473 F Street is now owned by
the Agency's Successor Agency and that it, Civic,
manages the lease. Further, the notice states: “the
lease allowing your firm to use the 1473 F Street
property for your billboard has expired and will
not be renewed and that you have thirty days to
completely remove your billboard structure and
any ancillary material from this property.” Id.
On September 7, 2016, four-years after the
dissolution of the Agency, City, “solely in its
capacity as the designated successor agency to the
Redevelopment Agency of the City of San Diego,
a former public corporate and politic (“Grantor”)”
granted to “the City of San Diego, a California
municipal corporation, ” the 1473 F Street
property. (Doc. No. 30-3 at 115-120; Doc. No 31-
12 at 2-7; Doc. No. 33-5 at 206-211; Doc. No. 36-
11 at 2-7; Doc. No. 37-15 at 2-7.)
In December 2016, San Diego City Council
passed a new resolution authorizing execution of
five-year operating agreement between City and
Civic. (Doc. No. 33-5 at 147-150). A new
operating agreement was duly signed in March
2017. (Doc No. 33-5 at 109-152; Doc. No. 37-13
at 2-45.)
On May 21, 2018, Outfront sent a letter to City in
response to City's May 2, 2018, letter. (Doc. No.
34-8 at 2-6; Doc. No. 35-8 at 2-6.) According to
Outfront's letter, Civic, acting on behalf of City,
had demanded the immediate removal of the
billboard. (Id. at 2.) It states: “Civic has taken the
position that the Successor Agency may terminate
Outfront's Lease No. 80531 (the “Lease”) as the
successor-in-interest to the prior Property owner,
and thus without having to compensate Outfront
under California's eminent domain laws. We
disagree.” (Id.) Outfront's letter also mentions a
January 15th notice of termination and claims that
because the Agency could have taken the Property
by eminent domain, the January notice “amounts
to the ‘substantial equivalent of a condemnation
action.” (Id. at 4.)
On April 17, 2019, City sent CBS
Outdoor/Outfront notice for the purpose of
terminating its tenancy of the billboard structure
4
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
(Doc. No. 31-13 at 2; Doc. No. 33-4 at 9: Doc.
No. 36-12 at 2; Doc. No. 37-3 at 2.) Along with
the notice, City remitted Outfront's checks totaling
$400 for March and April's rent. (Id.)
on the property located at 1473 F Street. (Doc. No.
31-13 at 2-4; Doc. No. 33-4 at 9; Doc. No. 36-12
at 2-4; Doc. No. 37-3 at 2.) The Notice explained:
[t]he Addendum to Lease No. 80531, dated
October 19, 2005, (Lease) currently allows
for the renewal of the Lease from month to
month, however the City of San Diego
(City), as Lessor, has the right to terminate
the Lease at any time during this month to
month term. As required by the Lease,
CBS Outdoor must remove its structure
within thirty (30) days after service of this
Notice upon you and you are required to
quit and surrender possession of the
Premises to the City no later than thirty
(30) days after service of this Notice upon
you. This Notice of Termination is served
upon you for the City to begin construction
of East Village Green Park on the
Premises.
On May 16, 2019, City sent Outfront a letter
announcing City was moving forward with its
right to possess the 1473 F Street property
effective midnight on May 17, 2019. (Doc. No.
30-3 at 122-123; Doc. No. 33-4 at 11-12; Doc. No.
37-4 at 2-3) The letter noted that “[a]ny issues
surrounding eminent domain or relocation benefits
should be the subject of civil litigation
commenced after Outfront Media surrenders
possession of the premises to the City.” (Id. at
122; 11; 2.)
The billboard was removed by May 28, 2019.
B. Procedural History
On November 22, 2019, Outfront filed suit against
City and Civic alleging: (1) inverse condemnation
in violation of the Fifth Amendment of the United
States Constitution; (2) Defendants' acts,
omissions, and conduct violated Plaintiff's rights
and interests to the billboard without due process
of law under the Fifth Amendment to the U.S.
Constitution, pursuant to 42 U.S.C. section 1983;
(3) violation of California Business and
Professions Code section 5412; (4) breach of
contract; (5) intentional interference with
prospective economic advantage; (6) negligent
interference with prospective economic advantage;
(7) unfair practices in violation of California
Business and Professions Code section 17200, et
seq; and (8) declaratory relief. (Doc. No. 1.)
Outfront brought suit in federal court pursuant to
28 U.S.C. § 1331, asserting this court has original
jurisdiction because its “claims arise under federal
law in that a substantial, disputed question of
federal law and is [sic] necessary element of
Plaintiffs [sic] claims …” (Id. at ¶ 3.) It sought
relief for the state law claims pursuant to the
court's supplemental jurisdiction, per 28 U.S.C. §
1367(a). (Id. ¶ 4.)
On February 16, 2021, the parties filed cross
motions for summary judgment. (Doc. Nos. 30,
31, 32, 33.) Plaintiff seeks partial summary
judgment on its inverse condemnation and due
process claims. (Doc. No. 30). City seeks
summary judgment on all claims. (Doc. No. 36.)
Civic, in turn, also seeks summary judgment on all
claims. (Doc. No. 33.) The parties timely filed
their responses in opposition, (Doc. Nos. 34, 35,
36, 37 ) and replies (Doc. Nos. 38, 39, 40).
3
4
5
3 Civic filed two motions for summary
judgment (Doc. Nos. 32, 33.) The court
performed a cursory review of the motions
and unsuccessfully attempted to contact
counsel to determine which of the two
motions it should use. For purposes of this
order, the court will use the later filed
motion, (Doc. No. 33). Accordingly,
Civic's duplicative motion for summary
judgment, entered on the docket at
CM/ECF Doc. No. 32 is DENIED as
MOOT.
5
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
4 Along with its motion, Civic filed a request
for judicial notice of several exhibits
attached to its motion. (Doc. No. 33-3).
Plaintiff has not objected to the request and
finding the documents the type of which
the accuracy cannot reasonably be
questioned, the court takes judicial notice
of Exhibits 1-13, attached to the
declaration of Eli Sanchez, pursuant to
Federal Rule of Evidence 201.
5 Along with its response in opposition,
Civic filed a request for judicial notice of
several exhibits attached to its opposition.
(Doc. No. 37-17). Plaintiff has not objected
to the request and finding the documents
the type of which the accuracy cannot
reasonably be questioned, the court takes
judicial notice of Exhibits 1-7, 12, 13
attached to the declaration of Eli Sanchez,
pursuant to Federal Rule of Evidence 201.
II. LEGAL STANDARDS
A motion for summary judgment is proper when
the pleadings, depositions, answers to
interrogatories, and admissions on file together
with the affidavits, if any, show “that there is no
genuine issue as to any material fact and the
[moving party] is entitled to judgment as a matter
of law.” Fed.R.Civ.P. 56(c). Entry of summary
judgment is proper “against a party *8 who fails to
make a showing sufficient to establish the
existence of an element essential to that party's
case, and on which that party will bear the burden
of proof at trial.” Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). The moving party bears the
initial burden of informing the court of the basis
for its motion and identifying those portions of the
record that it believes demonstrate the absence of
a genuine issue of material fact. Id. at 323 (1986).
8
If a moving party carries its burden of production,
the nonmoving party must produce evidence to
support its claim or defense. See Nissan Fire &
Marine Ins. Co., Ltd. v. Fritz Cos, Inc., 210 F.3d
1099, 1103 (9th Cir. 2000); High Tech Gays v.
Defense Indus. Sec. Clearance Office, 895 F.2d
563, 574 (9th Cir. 1990); Cline v. Indus. Maint.
Eng'g. & Contracting Co., 200 F.3d 1223, 1229
(9th Cir. 1991). Rule 56(e) requires “the
nonmoving party to go beyond the pleadings and
by her own affidavits, or by the ‘depositions,
answers to interrogatories, and admissions on file,'
designate ‘specific facts showing that there is a
genuine issue for trial.'” Celotex, 477 U.S. at 324.
In other words, the nonmoving party cannot “rest
upon mere allegations or denials of his pleadings.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986); see also Taylor v. List, 880 F.2d 1040,
1045 (9th Cir. 1989) (the non-moving party may
not rely solely on conclusory allegations
unsupported by factual data).
The mere existence of some factual dispute
between the parties will not defeat an otherwise
properly supported motion for summary judgment;
the requirement is that there be no genuine issue
of material fact. Anderson, 477 U.S. at 247 - 248.
“Summary judgment will not lie if the dispute
about a material fact is ‘genuine,' that is, if the
evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id. at
248. The inquiry is whether “the evidence presents
a sufficient disagreement to require submission to
a jury or whether it is so one-sided that one party
must prevail as a matter of law.” Id. at 251 - 252.
The court must examine the evidence in the light
most favorable to the nonmoving party, United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962),
and any doubt as to the existence of an issue of
material fact requires denial of the motion,
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
“When parties submit cross-motions for summary
judgment, ‘[e]ach motion must be considered on
its own merits.” Fair Housing Council of
Riverside Cnty., Inc. v. Riverside Two, 249 F.3d
1132, 1136 (9th Cir. 2001) (quotations and
citations omitted). The court must review the
evidence submitted in support of each cross-
motion and determine whether disputed issues of
material fact are present, even if both parties assert
6
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
that there are no uncontested issues of material
fact. Id; see also United States v. Fred A. Arnold,
Inc., 573 F.2d 605, 606 (9th Cir. 2000). If,
however, the cross-motions are before the court at
the same time, the court is obliged to consider the
evidence proffered by both sets of motions before
ruling on either one. Fair Housing Council of
Riverside Cnty., Inc., 249 F.3d at 1134.
III. DISCUSSION
Since the cross motions for summary judgment
request adjudication of the same issues and
contain arguments common to all, the court will
address the motions together.
A. Inverse Condemnation
Outfront argues that a grant of summary judgment
is warranted on the inverse condemnation claim
because the facts demonstrate that Defendants
effectuated a regulatory taking of its property, the
billboard, for which they must pay just
compensation under the Fifth and Fourteenth
Amendment of the United States Constitution.
(Doc. No. 30; see also Doc. Nos 34, 35.) City, in
contrast, maintains that summary judgment in its
favor is appropriate because it never threatened or
manifested an intention to exercise eminent
domain over Outfront's property, and that the lease
was terminated properly. (Doc. No. 31; see also
Doc. No. 36.) Further, City argues, that it cannot
be held liable for the actions taken by a separate
and independent former legal entity over ten years
ago. And, Civic contends that the eminent domain
and due process claims against it fail because it is
not a government entity, and it does not have the
power of eminent domain. (Doc. No. 33; see also
Doc. No. 37.)
“Inverse condemnation is ‘a cause of action
against a governmental defendant to recover the
value of property which has been taken in fact by
the governmental defendant.'” Knick v. Township
of Scott, Pennsylvania, 139 S.Ct. 2162, 2168
(2019) (quoting United States v. Clarke, 445 U.S.
253, 257, (1980) (quoting D. Hagman, Urban
Planning and Land Development Control Law 328
(1971))). In Chicago, Burlington & Quincy
Railroad Co. v. City of Chicago, 166 U.S. 226
(1897), the Supreme Court made the Fifth
Amendment's prohibition against uncompensated
takings applicable to the states through the
Fourteenth Amendment's due process clause. The
Court held that state compensation for government
takings must comport with due process of law. Id.
Recently, the Supreme Court clarified that a
property owner has an actionable Fifth
Amendment takings claim when the government
takes his/her property without just compensation
and may bring his/her claim in federal court under
§ 1983 as soon as the property is taken and no
longer has to exhaust the state-litigation
requirement. Knick, 139 S.Ct. at 2167-68, 2170-
73.6
6 This is because “once there is a ‘taking,'
compensation must be awarded” because
“[a]s soon as private property has been
taken, whether through formal
condemnation proceedings, occupancy,
physical invasion, or regulation, the
landowner has already suffered a
constitutional violation.” Id. at 2172
(quoting San Diego Gas & Elec. Co. v. San
Diego, 450 U.S. 621, 654, (1981)
(Brennan, J., dissenting)).
“Municipalities possessing delegated eminent
domain power also are subject to the restrictions
of the Fifth and Fourteenth Amendments.”
Richardson v. City & Cnty. of Honolulu, 124 F.3d
1150, 1156 (9th Cir. 1997) (citing Chi. B. &
Q.R.R. Co. v. City of Chi., 166 U.S. 226, 238-39
(1896)). The applicable provision of the California
Constitution provides, in relevant part, that
“[p]rivate property may be taken or damaged for
public use only when just compensation … has
first been paid to, …, or for, the owner.” Art. 1 §
19, Cal. Constitution. “Although the California
Constitutional takings clause at art. 1., § 19,
protects a somewhat broader range of property
values than does the same corresponding federal
provision, California courts have construed the
7
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
clauses congruently and applied federal law in
analyzing state law claims.” Daniel and Francine
Scinto Found. v. City of Orange, No. SA CV 15-
1537-DOC (JCGx), 2016 WL 4150453, at * 4
(C.D. Cal. Aug 3, 2016) (internal quotation marks
and citations omitted).
To establish its claim for inverse condemnation
against Civic and City, Outfront must show (1) it
has an interest in real or personal property, (2) the
government substantially participated in planning,
approval, construction or operation of the public
project or public improvement, (3) plaintiff's
property suffered damage, and (4) the
government's project, act, or omission was a
substantial cause of the damage. See Yamagiwa v.
City of Half Moon Bay, 423 F.Supp.2d 1036, 1088
(N.D. Cal. 2007). California Code of Civil
Procedure section 1263.205 provides that an
owner of any “improvements pertaining to the
realty” on property taken by eminent domain,
“that cannot be removed without a substantial
economic loss, ” is entitled to compensation for
the value of the improvements. Further, the code
provides that the “owner of a business conducted
on the property taken [] shall be compensated for
loss of goodwill, if … the loss is caused by the
taking of the property.” Cal. Civ. Proc. Code §
1263.510. The same eminent domain statutory
rules apply to suits in inverse condemnation. See
Chhour v. Cmty. Redevelopment Agency, 46
Cal.App.4th 273, 280 (1996).
1. The Sale of the 1473 F Street property
Because Outfront has attempted to connect the
2019 lease termination with the 2010 sale of the
property on which the billboard is located, (Doc.
No. 30-1 at 4-6; see also Doc. No. 38 at 6-9), the
court begins its analysis by looking at the sale of
the 1473 F Street property.
On February 1, 2010, the CCDC sent a letter to
Navarra Properties proposing the sale of 1473 F
Street, which is the property on which the
billboard is located, for a public project. (Doc. No.
30-2 at 41-68; Doc. No. 31-8 at 2-13). On the
same date, the CCDC sent CBS Outdoor an offer
to purchase the billboard so that the Agency could
initiate negotiations regarding the proposed
acquisition of 1473 F Street for future use as East
Village public park. (Doc. No. 30-3 at 70-81; Doc.
No. 36-7.) CBS Outdoor declined the offer to
purchase the billboard. (Doc. No, 33-5 at 196.)
Thereafter, the Agency purchased 1473 F Street
from Navarra Properties. (Doc. No. 30-3 at 88-
109; Doc. No. 31-8 at 2-4; Doc. No. 33-5 at 213-
223; Doc. Nos. 34-7 at 2-13; Doc. No. 35-7 at 2-
13; Doc. No. 38-8 at 2-13.)
While it is undisputed that the Agency had the
power of eminent domain, the parties dispute
whether the Agency exercised eminent domain in
purchasing 1473 F Street. Admittedly, the
agreement for the purchase of 1473 F Street
contains the language: “Buyer and Seller
acknowledge that the sale of the Property is under
the threat of eminent domain.” (Doc. No. 30-3 at
88-109 ¶ 16; Doc. No. 33-5 at 213-223, ¶ 16; Doc.
No. 34-7 at 2-13, ¶ 16; Doc. No. 35-7 at 2-13, ¶
16; Doc. No. 37-16 at 2-28, ¶ 16; Doc. No. 38-8 at
2-13, ¶ 16.) The letters to CBS Outdoor and
Navarra Properties also include a paragraph
stating: “California Government Code section
7267.1 provides that a public entity shall make
every reasonable effort to acquire expeditiously
real property by negotiation rather than by
litigation in the form of an eminent domain action.
Please consider this offer as being made in the
spirit of avoiding litigation, and not as an
admission of value.” (Doc. No. 30-3 at 43; Doc.
No. 31-8 at 4; Doc. No. 30-3 at 72; Doc. No. 36-
7.) Although 1473 F Street was sold so it could
later be used for the public purpose of developing
the East Village public park the evidence does not
suggest a taking occurred. The acquisition of 1473
F Street consisted of an open market transaction
(see Langer v. Redevelopment Agency of City of
Santa Cruz, 71 Cal.App.4th 998, 1004 (1999)
(collecting cases)) in which the offer included a
summary of sales of similar properties that were
recently sold that was used to value the property,
8
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
(see Doc. No. 33-5 at 181-185). Assuming,
however, the property was acquired by threat of
eminent domain directed at Navarra Properties,
the same cannot be said for Outfront's leasehold
interest, as set forth below.
2. Removal of the billboard
Outfront contends that City's demand that the
billboard be removed was the substantial
equivalent to a “taking” in the parlance of eminent
domain law. It maintains that it is entitled to any
lost goodwill and/or other damage flowing from
the termination of its leasehold interest in, and the
removal of the billboard from 1473 F Street. At
the threshold, two unassailable propositions need
to be recognized. First, simply stated, Outfront did
not, (and does not), stand in the shoes of Navarra
Properties, the owner of the property being
acquired, Outfront's interest was a leasehold,
limited by contract, and terminable virtually at any
time upon timely notice from the City. Second,
Outfront suffered “no damage, ” the third
necessary element for an inverse condemnation
claim; rather only the natural and unavoidable
contractual consequence of agreeing to a month-
to-month lease. Moreover, nothing in the record
suggests CBS Outdoor itself was ever threatened
with eminent domain by the Agency. The
February 1, 2010, letter from the CCDC simply
conveys its intent to recommend that the Agency
offer to purchase the billboard as part of its
proposed acquisition of 1473 F Street, (see Doc.
No. 30-3 at 70-81; Doc. No. 36-7 at 2-13). The
fact that the parties attempted to negotiate the
relocation of the billboard after CBS Outdoor
rejected the initial offer of $12, 160, (see Doc. No.
33-5 at 196-97) does not change this conclusion.
Similarly, City's decision to allow Outfront to
continue with its leasehold for almost nine years
after the Agency acquired 1473 F Street does not
alter the analysis. And, notwithstanding the fact
that City has the power of eminent domain, City
never exercised its power of eminent domain or
threatened its use regarding the billboard's lease,
and no substantiated facts have been produced to
suggest otherwise. To the contrary, during her
30(b)(6) deposition, Outfront's Katie Metz, stated
that as far as she was aware, City has never told
Outfront that it would use the power of eminent
domain to obtain the billboard, (Doc. No. 31-3 at
26; Doc No. 36-4 at 26; see also id. at 26-27
(confirming second letter sent by City makes no
reference to attempting or wanting to use the
power of eminent domain to take the billboard)).
In sum, what is absent here is an unequivocal act
or intent to condemn from City which would
convert the termination of the month-to-month
lease into the substantial equivalent of City
exercising its eminent domain power to condemn
the billboard. See Pacific Outdoor Adver. Co. v.
City of Burbank, 86 Cal.App.3d 5, 11 (1978) (for
termination of a lease to be the substantial
equivalent of exercising eminent domain there
needs to be “a definite and unequivocal
manifestation that the public entity in question
was ready to use its power to condemn, and in fact
would clearly do so if necessary to acquire the
property at issue.”). The mere fact that City has
the power of eminent domain, when in fact such
power is neither exercised nor remotely
threatened, is insufficient to render it liable in an
inverse condemnation action. See Id. at 12.
Furthermore, the caselaw in this area demonstrates
that the contract controls. Where “[t]he rights and
duties of the parties spring from the lease [, ] [s]o,
too, liabilities arising from breach of the lease are
creatures of the agreement. There is no reason to
impose extracontractual liability for breach,
simply because the breaching party is a
governmental entity.” Cnty. of Ventura v. Channel
Islands Marina, Inc. 159 Cal.App.4th 615, 624
(2008). Federal courts have also not recognized
takings claims where the taken property arose
from a contract or lease. See, e.g., Detroit Edison
Co. v. United States, 56 Fed.Cl. 299, 302 (Fed.
Cir. 2003) (the concept of a taking as a
compensable claim has limited application “when
‘the relative rights of party litigants ... have been
voluntarily created by contract. In such instances
9
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
interference with such contractual rights generally
gives rise to a breach claim not a taking[s] claim.'”
(quoting Hughes Commc'ns Galaxy, Inc. v. United
States, 271 F.3d 1060, 1070 (Fed.Cir.2001));
Marathon Oil Co. v. United States, 16 Cl. Ct. 332,
339 (Cl. Ct. 1989) (“the concept of a taking as a
compensable claim theory has limited application
to the relative rights of party litigants when those
rights have been voluntarily created by contract.
[citation omitted]. In such instances interference
with such contractual rights generally gives rise to
a breach claim not a taking claim.”).
Here, once the sale of 1473 F Street was recorded,
the Agency and CBS Outdoor did not negotiate a
new lease; rather, the old lease and addendum
transferred to the Agency. Inasmuch as the
Agency, at the time of purchase was not ready to
develop the East Village Park, it appears it was
willing to allow CBS Outdoor to continue to pay
rent and maintain the billboard at 1473 F Street.
Between August 2010 - January 2013 the record
illustrates that CBS Outdoor continued its lease
until it received notice from Civic that the lease
would be terminated. (Doc. No. 35-4 at 2; Doc.
No. 38-5 at 2; Doc. No. 38-6 at 2.) For reasons not
known to the court, the lease was not terminated in
February 2013, rather it was extended until City
sent a notice of termination on May 8, 2018. (Doc.
No. 34-8 at 2-6; Doc. No. 35-8 at 2-6.) Again,
City chose to change course and the parties
reverted to a month-to-month lease.
The 2005 Addendum to the lease, which created a
month-to-month leasehold, with a thirty-day
notice requirement, continued to control the
parties' contractual arrangement. (See Doc. No.
30-2 at 8; Doc. No. 31-7 at 2; Doc. No. 33-4 at 7;
Doc. No. 36-6 at 2.) As required by the
Addendum, on April 17, 2019, City sent CBS
Outdoor/Outfront notice that it was terminating its
tenancy of the billboard structure. The notice
provided the required 30-day notice and explains,
that although the lease allows for renewal, it was
being terminated so City could “begin
construction of East Village Green Park on the
Premises.” (Doc. No. 31-13 at 2; Doc. No. 33-4 at
9: Doc. No. 36-12 at 2; Doc. No. 37-3 at 2.) City
sent a follow up letter on May 16, 2019
confirming its intention to terminate the lease at
the end of the 30-day termination period. (Doc.
No. 30-3 at 122-123; Doc. No. 33-4 at 11-12; Doc.
No. 37-4 at 2-3.) City duly provided Outfront
access to 1473 F Street so that it could retrieve the
billboard. Outfront entered the property and
removed the billboard in May 2019.
In sum, the court finds no reasonable trier of fact
could reasonably infer City's actions regarding the
removal of the billboard from the 1473 F Street
property related to or was a function of its eminent
domain power. Rather, the court views City's
power to condemn simply as coincidental to the
valid termination of a month-to-month lease. Put
another way, Outfront falls leagues short of
creating a triable issue of material fact on the third
element of an inverse condemnation claim, i.e.,
“damages” due to governmental planning or
property acquisition for a public project.
3. Eminent Domain Liability
For the sake of completeness, and because the
parties have dedicated pages of their briefs to the
issue, the court turns the question of whether
either City or Civic could be held liable for a
claim of eminent domain.
On January 12, 2012, City was designated as the
Agency's successor agency. (Doc. 31-11 at 4; Doc.
No. 31-11 at 2; Doc. No. 36-9 at 2-5; Doc. No. 37-
8 at 2-5.) A subsequent resolution, passed by the
city council on February 17, 2012, establishing
certain policies and procedures for the operation
of the successor agency includes the following
provision:
10
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
(Doc. No. 31-11 at 2-3; Doc. No. 31-11 at 2-3;
Doc. No. 36-10 at 2-3.) Further, the resolution
provides that for purposes of filing lawsuits and
claims: “the name of the Successor Agency shall
be: ‘City of San Diego, solely in its capacity as the
designated successor agency to the
Redevelopment Agency of the City of San Diego,
a former public body, corporate and politic.'” (Id.
at 4, ¶ 1.)
Whereas, at the time of Former A[gency]'s
dissolution, the City, in its capacity as the
successor agency to the Former [Agency]
(Successor Agency), became vested with
all of the Former A[gency]'s authority,
rights, powers, duties, and obligations
under the California Community
Redevelopment Law and, by operation of
law, received all assets, properties,
contracts, leases, books and records,
buildings and equipment of the Former
A[gency] for administration pursuant to
the Dissolution Provisions
The June 28, 2012 resolution approving CCDC's
reorganization and name change to Civic notes
that City is the sole member of CCDC/Civic.
(Doc. No. 33-5 at 62; Doc. No. 37-10 at 2.)
Further, it provides: “at the time of the Former
A[gency]'s dissolution, the City, in its capacity as
the successor agency to the Former A[gency]
(Successor Agency), became vested with all of the
Former A[gency]'s authority, rights, powers,
duties, and obligations under the California
Community Redevelopment Law…” (Id. at 63; 3.)
In June 2012, City and Civic entered into an
agreement which allowed for Civic to provide
services to City for Successor Agency and
Housing Successor Agency Services. (Doc. No.
33-5 at 67-103; Doc. No 37-11 at 2-38.) Civic's
role was defined as a consultant to provide
services related to the winding down and/or
completion of projects of the former Agency. (Id.
at ¶ 1.1.)
Civic and City entered into a second operating
agreement in December 2016. (Doc. No. 33-5 at
109-152; Doc No. 37-13 at 2-45.) The agreement
provides for Civic to provide support to City as
successor agency to the Agency. (Id. at ¶ 2.1.2.)
Specifically, the pertinent section of provision
2.1.2 states: “Civic shall take all steps necessary
and desirable by City to perform the functions
required to implement the winding down of
redevelopment and/or completion of projects of
the [] Agency and to manage the assets of the
Former Agency….” (Id.)
The documents described above and the submitted
deposition testimony of Elias Sanchez, Civic's
person most knowledgeable, (see, e.g., Doc. No.
30-3 at 37-38; Doc. No. 34-3 at 17-19, 24-27, 32-
33; Doc. No. 35-3 at 17-19, 24-27, 32-33; Doc
No. 38-4 at 17-19, 24-27, 32-33) and City's
designated individual, Brad Richter (see, e.g.,
Doc. No. 30-3 at 12-14; Doc. No. 34-6 at 14-15;
Doc. No. 35-6 at 14-15; Doc. No 38-7 at 15) make
clear that Civic, and its predecessor the CCDC,
were simply acting as agents of both the Agency
and City. Civic's role was that of a consultant,
manager, or broker. (Doc. No. 30-3 at 12-14, Doc.
No. 30-3 at 37-38.) When it communicated with
Navarro Properties, Outfront, or any of Outfront's
predecessors in interest, it was doing so in this
capacity. Despite Outfront's protestations to the
contrary (see Doc. No. 34 at 9-17, Doc. No. 38 at
3-6), Civic has never had the power of eminent
domain, was not the purchaser of 1473 F Street,
has not attempted to acquire the billboard and
none of its actions can be viewed as constituting
inverse condemnation. Looking back to 2010,
Civic's predecessor, CCDC, did indeed propose
the acquisition of the billboard, (see Doc. No. 30-3
at 70-81; Doc. No. 36-7 at 2-13), but it did so at
the direction of the Agency, (see id.). Furthermore,
Plaintiff made an error in misidentifying Civic as
the Agency's successor agency in the complaint,
(Doc. No. 1 ¶ 7). The record demonstrates that
City was designated as the Agency's successor
11
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
agency. (Doc. No. 31-11 at 4; Doc. No. 31-11 at 2;
Doc. No. 36-9 at 2-5.) Consequently, any inverse
condemnation claim against Civic cannot stand.
As to City's arguments that it has been
misidentified in the complaint and cannot be sued
as a municipality for any actions it took as the
successor agency, none of these arguments control
the outcome of the motions currently before the
court.
4. Conclusion on Inversion Condemnation
Claim
In accordance with the following, the court denies
Plaintiff's motion for partial summary judgment on
the inverse condemnation claim and grants City's
and Civic's motions for summary judgment on the
first cause of action.
5. Violations of Fifth and Fourteenth
Amendment to the U.S. Constitution, 42 U.S.C.
§ 1983
As set forth above, Outfront has not established
that a taking occurred, therefore, there has been no
violation of the Fifth or Fourteenth Amendments.
Consequently, the 42 U.S.C § 1983 cause of
action, brought on the basis of a violation of the
Fifth Amendment prohibition against
uncompensated takings also fails. See Knick, S.Ct.
2162, 2167-68. (property owner may bring a Fifth
Amendment takings claim in federal court under §
1983 when the government takes property without
just compensation). To the extent Outfront
attempts to base its second cause of action on an
alleged breach of contract claim, this fails because
Outfront explicitly abandoned its breach of
contract claim, (see Doc. No. 34 at 21; Doc No. 35
at 11). Accordingly, the court denies Plaintiff's
motion for partial summary judgment on the 42
U.S.C. § 1983 due process claim and grants City's
and Civic's motions for summary judgment on the
second cause of action.
B. Remaining State Law Claims
Federal courts have the discretion to exercise
supplemental jurisdiction over all claims that are
“so related to claims in the action within such
original jurisdiction that they form part of the
same case or controversy under Article III of the
United States Constitution.” 28 U.S.C. § 1367(a).
Even if supplemental jurisdiction exists, however,
district courts may decline to exercise
supplemental jurisdiction over a claim if: (1) it
raises a novel or complex issue of state law; (2) it
substantially predominates over the claim(s) over
which the court has original jurisdiction; (3) the
court has dismissed all claims over which it has
original jurisdiction; or (4) there are other
compelling reasons for declining jurisdiction. 28
U.S.C. § 1367(c). The Supreme Court has
identified additional factors that district courts
should consider when deciding whether to
exercise supplemental jurisdiction, “including the
circumstances of the particular case, the nature of
the state law claims, the character of the governing
state law, and the relationship between the state
and federal claims.” City of Chi. v. Int'l Coll. of
Surgeons, 522 U.S. 156, 173 (1997).
“While discretion to decline to exercise
supplemental jurisdiction over state law claims is
triggered by the presence of one of the conditions
in § 1367(c), it is informed by the Gibbs values
'of economy, convenience, fairness, and comity.'"
Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001
(9th Cir. 1997) (enbanc) (citations omitted). A
district court need not "articulate why the
circumstances of [the] case are exceptional" to
dismiss state-law claims pursuant to 28 U.S.C.
section 1367(c)(1)-(3). San Pedro Hotel Co., Inc.
v. City of L.A., 159 F.3d 470, 478-79 (9th Cir.
1998) (citation omitted).
7
7 United Mine Workers of Am. v. Gibbs, 383
U.S. 715 (1966).
Here, only two out of the nine claims are federal
claims. As set forth above, the court has granted
summary judgment in Defendants' favor on the
only two claims over which it had original
12
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
jurisdiction. The remaining claims involve
questions of state law. Accordingly, the court
DECLINES SUPPLEMENTAL
JURISDICTION as to the remaining state law
claims against Defendants. As a result, the court
does not address the merits of the motions for
summary judgment as to the third through ninth
causes of action. Outfront may refile what remains
of these claims in state court if it wishes, although
the court notes that in its opposition to City's and
Civic's motions for summary judgment, Outfront
abandoned its claims against Civic for breach of
contract and declaratory relief, see Doc. No. 34 at
21, and abandoned its claims against City for
breach of contract and Business & Professions
Code section 17200, see Doc. No. 35 at 11.
IV. CONCLUSION
For the foregoing reasons, City's and Civic's
motions for summary judgment on the inverse
condemnation and due process claims are
GRANTED. Outfront's motion for partial
summary judgement is DENIED. The Clerk of
Court shall enter judgment for Defendants on
claims one and two and CLOSE the case.
IT IS SO ORDERED. *1010
13
Outfront Media, LLC v. City of San Diego Case No.: 19cv2236 JM(BGS) (S.D. Cal. Jun. 1, 2021)
No. 20-5562
United States Court of Appeals, Sixth Circuit
Outfront Media, LLC v.Lemaster
Decided Sep 22, 2021
20-5562 20-5563
09-22-2021
OUTFRONT MEDIA, LLC, Plaintiff-Appellee, v.
TERRI LEMASTER; PERFORMANCE MEDIA,
LLC, Defendants/Third-Party Plaintiffs-
Appellants, RANDALL POWELL; BRENDA
POWELL, Third-Party Defendants-Appellees.
CLAY, CIRCUIT JUDGE.
NOT RECOMMENDED FOR PUBLICATION
ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE EASTERN
DISTRICT OF KENTUCKY
BEFORE: BOGGS, CLAY, and KETHLEDGE,
Circuit Judges.
OPINION
CLAY, CIRCUIT JUDGE.
Defendants-Appellants Terri LeMaster and
Performance Media, LLC, appeal the district
court's grant of summary judgment to Plaintiff-
Appellee Outfront Media, LLC, on its conversion
claim. They also appeal the dismissal of their
counterclaim for tortious interference against
Outfront, the Kentucky Transportation Cabinet
("KYTC"), and Greg Thomas, in his official
capacity as KYTC Secretary, as well as their third-
party claims against Third-Party Defendants
Brenda and Randall Powell. For the reasons stated
below, we AFFIRM the district court's judgment.
*11
BACKGROUND
Outfront Media, LLC, owns and operates outdoor
advertising devices throughout the United States.
Performance Media, LLC, works in advertising
sales, and Terri LeMaster is the company's sole
owner. Between 1969 and 1973, Outfront Media's
predecessor-in-interest, National Advertising
Company, entered into five leases with Mrs.
Leonard ("Blanche") Powell, the owner of a farm
located along Interstate 75 near Mount Vernon,
Kentucky, to build and maintain five billboards on
her property. National Advertising constructed the
billboards, and, on September 9, 1983, it entered
into new leases with Blanche Powell. The 1983
leases each had an initial term of ten years, a
second term of ten years at National Advertising's
option, and one-year renewal terms unless either
party provided written notice of termination at
least 60 days prior to each lease's anniversary date.
1
1 The relevant chain of title for the billboards
is as follows: (1) National Advertising
Company entered into the 1969-1973 and
1983 leases with Blanche Powell; (2)
Outdoor Systems, Inc., acquired National
Advertising in August 1997 and took
ownership of National Advertising's
interests in the leases and billboards; (3) in
February 2000, Outdoor Systems was
renamed Infinity Outdoor, Inc.; (4) in
August 2001, Infinity Outdoor changed its
name to Viacom Outdoor, Inc.; (5) in
December 2005, Viacom Outdoor changed
its name to CBS Outdoor, Inc.; (6) CBS
Outdoor converted to a limited liability
company in June 2013; and (7) in
November 2014, CBS Outdoor, LLC,
became Outfront Media, LLC.
1
Under the 1983 leases, National Advertising paid
$400 a year to Blanche Powell when the billboards
were in an "advertising position." (R. 100-3, 1983
Leases at PageID # 1472.) In the event that "the
highway view of the Lessee's displays is
obstructed or obscured, or the advertising value of
the displays is impaired or diminished, or the use
or installation of such displays is prevented or
restricted by law," National Advertising could
terminate the leases with fifteen days' written
notice. (Id. at PageID # 1473.) If any of the
aforementioned conditions "temporarily exist,"
then National Advertising could, "at its option,
instead of terminating this lease, be entitled to an
abatement of rent payable" during that period, as
well as a refund of rent paid in advance. (Id.) And
"[a]ll structures, displays and materials placed
upon the said property by the Lessee are Lessee's
trade fixtures and equipment, and shall be and
remain the Lessee's property." (Id.) *22
Between July and September 1998, National
Advertising's successor-in-interest, Outdoor
Systems, Inc., renegotiated three of the five 1983
leases and left the other two 1983 leases in place.
The 1998 leases had the same lease term structure
as the 1983 leases, and termination was allowed
by written notice of either party at least 90 days
before the end of the lease term. Outdoor Systems
agreed to pay Blanche Powell $675 per year for
two of the leases and $900 per year for the third
lease. Like the 1983 leases, the 1998 leases
allowed Outdoor Systems to terminate the lease
with fifteen days' written notice if the billboards
were "entirely or partially obscured or destroyed"
or Outdoor Systems was "prevented by
government authority from constructing or
maintaining such signs." (Id. at PageID # 1475.) If
any of these conditions existed temporarily, then
Outdoor Systems could abate the rent during the
existence of the condition and have any rent paid
in advance of the period returned. Under the 1998
leases, any "materials and displays" placed on the
property by Outdoor Systems were "trade fixtures"
and property of Outdoor Systems, and "Lessee's
display(s) shall not be considered abandoned at
any time and shall not become the property of
Lessor except by express conveyance in writing."
(Id.)
The 1983 and 1998 leases were binding on the
parties' "heirs, successors, and assigns." (R. 100-4,
1998 Leases at PageID # 1475; see also R. 100-3,
1983 Leases at PageID # 1473.) And Blanche
Powell was required to notify the lessee "of any
change of ownership" in the farm and "give the
new owner formal written notice of the existence
of this lease." (R. 100-3, 1983 Leases at PageID #
1473; see also R. 100-4, 1998 Leases at PageID #
1475.)
The billboards were periodically inspected, and
the 1993 and 1995 inspections indicated that the
poles of the billboards were not in good condition.
The 1995 inspection specifically *3 revealed that
the poles had cracks; the walkways and the braces
of the poles were not in good condition; the
walkways were missing rails; and safety
equipment needed to be installed.
3
On February 8, 2001, Infinity Outdoor, Outdoor
Systems' successor-in-interest, wrote to Blanche
Powell, informing her that Infinity was unable to
sell advertising on three billboards located on her
property that were blocked by vegetation and
requesting that she have the trees cut back so that
the billboards could be visible. The letter noted
that lease payments had already been abated on
two of the leases due to tree problems, and that, if
the vegetation was not removed, then Infinity
would have to similarly abate lease payments on
the three additional leases. On May 30, 2001,
Infinity informed Blanche Powell that the lease for
the "Holiday Inn Express board" was "being
changed to Hold Pay status" because trees had
grown in front of it along Interstate 75. (R. 100-7,
Letter to Blanche Powell at PageID # 1495.) On
July 2, 2001, Infinity informed Blanche Powell
that it was similarly abating rent on the leases for
the "Meijer" and the "O'Charley's" boards. (R.
100-8, Letter to Blanche Powell at PageID #
2
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
1497.) Infinity urged her to contact her state
legislators to inform them "that they are
preventing you from receiving expected revenues
by not allowing trimming of right of way trees
along I-75." (Id.)2
2 Under Kentucky regulations at the time, "it
was prohibited to cut vegetation on state
right-of-way for the purpose of making a
billboard visible." (R. 100-9, Preece Dep.
at PageID # 1506.)
On December 31, 2001, now renamed Viacom
Outdoor, the company wrote to Blanche Powell
that it was able to sell advertising space on one of
the billboards, and it paid her the prorated rent
amount for the seven months left on the lease
term. Viacom said it would notify her as to
whether the company would be able to continue
lease payments in August 2002 and sell space on
the other four billboards. Viacom also encouraged
her to reach out to her state legislators and
indicated that it was planning to lobby the state
legislature in 2002 for a bill that would permit tree
trimming. On June 7, 2002, Viacom informed
Blanche Powell that the company had not been
able to acquire a sales contract for the following
lease term and that rent for that lease, along with
the four other leases, would be abated.
On November 30, 2001, Viacom placed four of the
billboards on a "target list to remove." (R. 100-14,
Outfront's Continuous Call Reports at PagelD #
1705-10.) In August 2004, now renamed CBS
Outdoor, the company requested that electricity be
permanently disconnected from the billboards. On
September 3, 2008, CBS Outdoor's real estate
representative sent letters to its general manager
"requesting termination" of the billboards, and, on
January 7, 2009, CBS Outdoor sought a quote to
terminate and remove the billboards. (Id.) No
further steps towards removing the billboards were
recorded, and the company did not end up
removing the billboards. David Watkins, Outfront
Media's Real Estate Manager, periodically
inspected the billboards to see if there was any
visibility from I-75. In 2010, Blanche Powell
passed away, and her children, Randall and
Brenda Powell, inherited her farm and the
billboard leases. Randall tried unsuccessfully to
notify CBS Outdoor of the change in ownership.
In November 2015, KYTC promulgated a new
regulation, which provided that owners of off-
premise advertising devices could exchange
removal of six devices for receipt of one "new off-
premise electronic advertising device permit." 603
Ky. Admin. Reg. 10:021 § 2(1). At that time,
LeMaster wanted Performance Media to begin
selling advertising on digital billboards, and she
sought credits towards a permit for an electronic
advertising device. On July 16, 2016, after seeing
the billboards while driving on I-75, LeMaster
visited the Powells' home and discussed removing
the billboards in exchange for KYTC credits with
Brenda Powell, who was under the impression that
LeMaster was with KYTC.
The Powells set up a meeting with LeMaster on
July 18, 2016, this time with Randall Powell in
attendance, during which the Powells purported to
transfer ownership of the billboards to LeMaster.
At this time, the Powells knew that Outfront had
abated the lease payments for the billboards.
LeMaster submitted the signed forms to KYTC,
and, on July 22, 2016, KYTC approved
LeMaster's request to remove the billboards. Upon
confirmation that they were removed, KYTC
issued LeMaster four credits.
3
4
3 During the second meeting, Randall Powell
told LeMaster that the leases had been
abated and that he had not been contacted
by the lessee.
4 LeMaster only received credits for four
billboards because KYTC could not
confirm the existence of a fifth, separate
billboard.
In February 2017, David Watkins of Outfront
Media sent a request for credits to KYTC for
removal of the billboards. KYTC informed
Watkins that the billboards had already been
removed and that the credits had been claimed.
3
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
After filing an Open Records Act request, Watkins
learned that LeMaster and Performance Media
received the credits for these billboards. Watkins
then requested that KYTC put an immediate hold
on the credits obtained by LeMaster and
Performance Media.
Outfront's counsel sent a demand letter to
LeMaster, explaining that Outfront, not the
Powells, owned the billboards in question;
Outfront had abated rent because the billboards
became obscured; and at no point did Outfront
terminate the leases. Outfront's counsel also
informed LeMaster that the company intended to
sue LeMaster and Performance Media for transfer
of the credits and damages, but Outfront would
not proceed with litigation if LeMaster transferred
the credits to Outfront, which she refused to do.
After Outfront's lawsuit was filed, KYTC denied
LeMaster's application for an electronic
advertising device permit because KYTC did not
want to do anything further with the credits until
Outfront's lawsuit was resolved.
Outfront filed the instant lawsuit against
LeMaster, Performance Media, KYTC, and Greg
Thomas, in his official capacity as KYTC
Secretary, invoking diversity jurisdiction. Outfront
asserted claims for conversion and tortious
interference with contract, and it sought transfer of
the credits as well as consequential and punitive
damages. In LeMaster and Performance Media's
amended answer, they included a counterclaim
against Outfront, KYTC, and Greg Thomas for
tortious interference with prospective economic
advantage and sought punitive damages for
transferring the credits at issue to Outfront.
LeMaster and Performance Media also filed a
third-party complaint against Randall and Brenda
Powell for negligent misrepresentation and breach
of contract, and they sought indemnity from the
Powells for any damages arising from Outfront's
suit.
Outfront, as well as LeMaster and Performance
Media, filed motions for summary judgment on
their claims. Outfront argued that: (1) LeMaster
and Performance Media had converted Outfront's
property-which it did not abandon by abating the
rent or leaving the billboards in disrepair-and
LeMaster had intended to interfere with Outfront's
possession of the billboards, did not transfer the
credits when asked to do so, and caused Outfront
to lose their property; (2) LeMaster had committed
tortious interference because Outfront had five
active leases for the billboards, which LeMaster
knew or should have known about, and LeMaster
caused the breach by inducing the Powells to
transfer ownership of the leases and allow her to
remove the billboards; (3) Outfront was entitled to
damages based on its net profits from what
Outfront had made on its existing electronic
billboards; and (4) LeMaster's tortious interference
counterclaim failed because Outfront's
communications with KYTC are protected by the
judicial-statements privilege, and LeMaster could
not make a sufficient showing as to the elements
of a tortious interference claim.
LeMaster and Performance Media argued that: (1)
Outfront had abandoned the billboards by abating
rent, failing to maintain the billboards, failing to
correspond with the Powells regarding *7 the lease
abatements, and failing to get proper permits for
the billboards; (2) LeMaster was a bona fide or
good-faith purchaser for the value of the leases;
(3) Outfront had not acted in a commercially
reasonable manner based on the aforementioned
conduct; (4) Outfront's conversion and tortious
interference claims failed because it had
abandoned the leases and failed to act in a
commercially reasonable manner; and (5) they
were entitled to summary judgment on the tortious
interference claim because LeMaster had a valid
contract for the billboards, and Outfront had
interfered with that contract by requesting that
KYTC place a hold on the credits.
7
4
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
The district court granted in part and denied in
part Outfront's, as well as LeMaster and
Performance Media's, motions for summary
judgment. Finding that Outfront retained legal title
to the billboards, the district court determined that
Kentucky regulations on abandonment of
billboards and permits do not affect ownership
rights. The court found that the leases provided a
broad authorization of abatement, and that the
Powells could have terminated the leases. The
district court also rejected LeMaster's argument
that Outfront had an implied duty to develop and
operate the billboards because the Powells could
terminate the leases and because the leases
protected against enforcement of implied terms.
And the court determined that enforcing Outfront's
leases did not violate public policy simply because
the relevant Kentucky regulations incentivized
removing old, nonconforming billboards owned
by entities like Outfront.
The district court then determined that summary
judgment to Outfront was proper on the
conversion claim because Outfront easily
established the remaining elements. The district
court rejected LeMaster's bona fide purchaser
defense because, as a matter of law, a purchaser's
good faith is irrelevant when a seller lacks title.
The district court denied summary judgment to
Outfront and granted to LeMaster on the tortious
interference claim because it found no triable issue
regarding whether LeMaster had actual knowledge
of the lease agreements between Outfront and *8
the Powells. Finally, the court denied summary
judgment to LeMaster and Performance Media
and granted to Outfront on their counterclaim
because Outfront's assertion of its rights under the
lease was not wrongful given that it had valid
rights to the billboards. The district court
concluded that Outfront was entitled to the credits,
but that the issue of consequential damages must
go to a jury.
8
Outfront filed a motion to voluntarily dismiss its
claim for damages against LeMaster and
Performance Media, which the district court
granted. The court also dismissed LeMaster and
Performance Media's third-party claims against
the Powells. The court dismissed Performance
Media as a party to the action for failing to retain
counsel and prosecute the claims, despite being
the real party in interest. The district court
declined to exercise supplemental jurisdiction over
LeMaster's third-party claims, given that the
original claims, which were before the court under
diversity jurisdiction, had been dismissed, and the
third-party claims had not been active during the
litigation. LeMaster and Performance Media
subsequently moved for relief from judgment
under Rules 59 and 60, which the district court
denied. This timely appeal followed.
DISCUSSION
Standard of Review
"We review a district court's grant of summary
judgment de novo." McClellan v. Midwest Mach.,
Inc., 900 F.3d 297, 302 (6th Cir. 2018). Summary
judgment will be granted "if the movant shows
that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a). A material fact
is one "that might affect the outcome of the suit,"
and a genuine dispute exists "if the evidence is
such that a reasonable jury could return a verdict
for the nonmoving party." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). "At the
summary judgment stage, the moving party bears
the initial burden of identifying those *9 parts of
the record which demonstrate the absence of any
genuine issue of material fact." White v. Baxter
Healthcare Corp., 533 F.3d 381, 389-90 (6th Cir.
2008).
9
Once the moving party has met its burden, the
burden shifts to the non-moving party to
demonstrate "specific facts showing that there is a
genuine issue for trial," although the evidence
need not be "in a form that would be admissible at
trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324
(1986) (internal quotation marks omitted). All
reasonable inferences are drawn in favor of the
5
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
C&H Mfg., LLC v. Harlan Cnty. Indus. Dev. Auth.,
Inc., 600 S.W.3d 740, 745 (Ky. Ct. App. 2020)
(emphasis omitted). On appeal, LeMaster focuses
her arguments on the element of legal title.
non-moving party. Mutchler v. Dunlap Mem'l
Hosp., 485 F.3d 854, 857 (6th Cir. 2007). When
parties file cross motions for summary judgment,
"the court must evaluate each party's motion on its
own merits, taking care in each instance to draw
all reasonable inferences against the party whose
motion is under consideration." B.F. Goodrich Co.
v. U.S. Filter Corp., 245 F.3d 587, 592 (6th Cir.
2001) (quoting Taft Broad. Co. v. United States,
929 F.2d 240, 248 (6th Cir. 1991)).
Analysis
The dispositive issue on appeal is whether the
district court erred in finding that Outfront had
legal title to the billboards; if not, summary
judgment to Outfront on its conversion claim
would be improper. The intentional tort of
conversion is defined as "the wrongful exercise of
dominion and control over the property of
another." Jones v. Marquis Terminal Inc., 454
S.W.3d 849, 853 (Ky. Ct. App. 2014). Under
Kentucky law, the elements of conversion are:
5
5 Relatedly, LeMaster contests the ownership
of the billboards by Outfront's predecessor,
Outdoor Systems; however, this argument
is not properly before this Court because
LeMaster did not substantiate this
argument at summary judgment, instead
waiting until her Rule 59 motion to do so.
See Evanston Ins. Co. v. Cogswell Prop.,
LLC, 683 F.3d 684, 692 (6th Cir. 2012)
("Arguments raised for the first time in a
motion for reconsideration are untimely
and forfeited on appeal.").
(1) the plaintiff had legal title to the
converted property; (2) the plaintiff had
possession of the property or the right to
possess it at the time of the conversion; (3)
the defendant exercised dominion over the
property in a manner which denied the
plaintiff's rights to use and enjoy the
property and which was to the defendant's
own use and beneficial enjoyment; (4) the
defendant intended to interfere with the
plaintiff's possession; (5) the plaintiff made
some demand for the property's return
which the defendant refused; (6) the
defendant's act was the legal cause of the
plaintiff's loss of the property; and (7) the
plaintiff suffered damage by the loss of the
property.
A. Illegal Purpose of the Leases
LeMaster first contends that Outfront's legal title
to the billboards is invalid because the billboards
had an illegal purpose, having been in violation of
the Billboard Act since 2003 when none of the
billboards displayed any current advertising
material. The Supreme Court of Kentucky has
stated that "a court may refuse to enforce a
contract on grounds of illegality where the
contract has a direct objective or purpose that
violates the federal or a state Constitution, a
statute, an ordinance, or the common law." Yeagar
v. McLellan, 177 S.W.3d 807, 809 (Ky. 2005). We
have said that a purpose may be illegal if it
violates administrative regulations promulgated
pursuant to legislation. See Martello v. Santana,
713 F.3d 309, 313 (6th Cir. 2013). In Martello, we
found that an attorney's fee-sharing agreement, in
which the attorney shared legal fees with a law
graduate who was not admitted to the bar, was
void because it violated the provision in the
Kentucky Rules of Professional Conduct that
6
6
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
prohibits sharing legal fees with non-lawyers. Id.
at 313-14. Similarly, in Bassett v. National
Collegiate Athletic Association, we concluded that
an agreement between a former University of
Kentucky football coach and the Athletic Director
to refrain from reporting misconduct was void for
violating public policy because "contracts that
require an employee to breach his fiduciary duty
to his employer are illegal and void under
Kentucky law." 528 F.3d 426, 438 (6th Cir. 2008)
(internal quotation marks and citation omitted).
6 LeMaster's argument regarding the
billboards having been illegal when they
were first installed is forfeited on appeal
because LeMaster failed to raise the
argument before the district court at
summary judgment. See Scottsdale Ins. Co.
v. Flowers, 513 F.3d 546, 552 (6th Cir.
2008) ("[A]n argument not raised before
the district court is waived on appeal to this
Court.").
Kentucky regulations of static advertising devices
provide that "[t]he erection or existence of a static
advertising device shall be prohibited in a
protected area if the device . . . [i]s abandoned or
discontinued." 603 Ky. Admin. Reg. 10:010 § 1(4)
(b). An advertising device is abandoned or
discontinued if, for a year or more, it has (1) "[n]ot
displayed advertising matter;" (2) "[d]isplayed
obsolete advertising matter;" (3) "[n]eeded
substantial repairs due to lack of maintenance;" or
(4) "[o]nly advertised for the sale, rent, or lease of
the advertising device." 603 Ky. Admin. Reg.
10:002 § 1(1). However, the regulations allow
owners of "currently nonconforming" or "illegal"
off-premise advertising devices to exchange these
devices for credits towards a permit for an
electronic advertising device. 603 Ky. Admin.
Reg. 10:021 § 2(1), (3).
7
8
7 This section was repealed and moved to
603 Ky. Admin. Reg. 10:040E.
8 The regulations allow a nonconforming
static advertising device to exist without a
permit if it is: (1) "[n]ot abandoned or
discontinued;" (2) "[s]ubjected to only
routine maintenance;" (3) "[i]n compliance
with state law and administrative
regulations as well as local zoning, sign, or
building restrictions at the erection;" and
(4) "[s]ubstantially the same as it was on
the effective date of the state law or
administrative regulation that made the
device nonconforming." 603 Ky. Admin.
Reg. 10:010 § 4(1). A nonconforming
advertising device is an "an off-premise
advertising device that at one (1) time was
lawfully erected but does not comply with
a . . . [c]urrent state law or administrative
regulation ...." 603 Ky. Admin. Reg.
10:002 § 1(23). Outfront agrees that the
billboards were nonconforming as of 1976.
Under the regulations, the billboards were
administratively abandoned and prohibited by law
in 2003 because they either lacked advertising or
displayed obsolete advertising and because they
needed substantial repairs. See 603 Ky. Admin.
Reg. 10:002 § 1(1). But the leases themselves did
not have an illegal purpose because it was not the
direct objective or purpose of Blanche Powell or
Outfront's predecessors in entering these leases to
maintain billboards that were illegal under
Kentucky regulations. Cf. Bassett, 528 F.3d at 438
("Bassett's admitted knowledge of selfreporting
obligations of himself and Ivy, coupled with his
admission that he violated NCAA rules,
necessarily renders any agreement to circumvent
those obligations, in order to suppress discovery
of Bassett's improprieties, void."). No provision of
the leases required either party to violate any of
the Kentucky billboard regulations-the leases even
allowed for termination if "the use or installation
of such displays is prevented or restricted by law
or by the Lessee's inability to obtain any necessary
permits or licenses." (R. 100-5, Leases in Effect in
2016 at PageID # 1483.)
Additionally, KYTC anticipated that owners
would retain possession of nonconforming and
illegal billboards by allowing owners to exchange
such billboards for credits towards an electronic
7
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
billboard permit. See 603 Ky. Admin. Reg 10:021
§ 2(3), (6) ("An off-premise advertising device to
be exchanged shall be . . . [c]urrently
nonconforming . . . or [i]llegal.... The owner of an
exchanged advertising device shall receive credit
by the department for each advertising device
removed after the effective date of this
administrative regulation."). And the regulations
do not require that billboards deemed to be
administratively abandoned be removed or for
their ownership to be transferred to the lessor,
opting instead for forfeiture, potential legal action,
and fines. See 603 Ky. Admin. Reg. 10:010 §§ 8-
9. This provides further support for the fact that
KYTC anticipated that entities like Outfront
would retain ownership of "illegal" billboards and
that such ownership does not seriously offend the
Kentucky regulations on billboards. Accordingly,
the billboard leases are not void for advancing an
illegal purpose.
B. Unenforceability of the Leases After Outfront
Stopped Using the Billboards
LeMaster then raises several arguments related to
why the leases became unenforceable once
Outfront stopped using the billboards to display
advertising materials. The first of these arguments
is that, because the billboard leases were for the
stated purpose of displaying advertising material,
once they were no longer used for that purpose,
the leases became unenforceable. LeMaster relies
on two Kentucky Court of Appeals cases to
support this argument: Hite v. Carmon, 486
S.W.2d 715 (Ky. Ct. App. 1972), and Lavit v.
Mattingly, No. 2014-CA-001676-MR, 2016 WL
4256911 (Ky. Ct. App. Aug. 12, 2016). *1313
In Hite, the contract at issue involved a lease
between Mary Hite and Sun Oil Company, in
which Sun Oil leased two acres of Hite's real
property to be used for its oil business and Sun Oil
could renew the lease term annually at its option.
486 S.W.2d at 716. After the company stopped
using the property for the oil business and
assigned the lease to employees who used it for
residential purposes, Hite sought to terminate the
lease because the property was not being used for
its stated purpose and the assignments occurred
without notice to Hite. Id. The court found that
Hite could terminate the lease under these
circumstances because "[t]he law does not favor
perpetual leases," and the lease was intended to be
limited to use of the property in connection with
the oil business. Id. at 717. On the other hand, in
Lavit, the court upheld a lease it interpreted as
allowing for multiple renewals of the lease by the
tenant so long as the premises continued to be
used as a law office. 2016 WL 4256911, at *5.
In the present case, the billboard leases allowed
Outfront to occupy the allotted portion of the
Powells' farm "for the purposes of erecting and
maintaining advertising displays." (R. 100-5,
Leases in Effect in 2016 at PageID # 1482.)
However, while the leases allowed for yearly
renewals at Outfront's option, unlike in Hite and
Lavit, both Outfront and the Powells had the
ability to terminate the lease. Additionally, the
billboard leases accounted for what would happen
if the purpose of the agreements-to display
advertising materials-were frustrated, by allowing
Outfront to terminate the lease or abate rent.
Outfront followed the protocol laid out in the lease
and abated rent during the time that the billboards
were obstructed. And, unlike Hite, in the present
case, Outfront did not attempt to use the billboards
for an unauthorized purpose. See 486 S.W.2d at
716. In fact, KYTC regulations prohibited
Outfront from making the necessary repairs and
removing obstructive vegetation to be able to use
the displays as intended. See Whiteco Metrocom
Corp. v. Commonwealth, 14 S.W.3d 24, 27 (Ky.
Ct. App. 1999) (noting that Kentucky law *14
"permits nothing other than routine maintenance"
of nonconforming billboards). Accordingly, the
leases did not become unenforceable based on
Outfront's inability to sell advertising on the
billboards.
14
8
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
LeMaster next argues that the leases were not
enforceable because it became impossible or
impracticable to use the billboards for advertising
displays given that the billboards were illegal
under Kentucky regulations and the billboards had
severely deteriorated. But, regardless of whether
the Kentucky regulations made Outfront's inability
to put up advertising displays impossible or
impracticable, the lease agreements accounted for
Outfront's inability to put up advertising displays
on its billboards by allowing Outfront to terminate
the lease or to abate rent, if, for example, the use
of the displays became illegal or the displays were
obstructed. Given the regulations preventing the
repair and removal of obstructions for
nonconforming billboards, Outfront decided to
abate the rent for the billboards pursuant to the
lease agreements. And, again, the Kentucky
regulations contemplate that entities like Outfront
owning nonconforming or illegal billboards can
exchange their removal for credits towards an
electronic advertising device, so that Outfront
could still enforce its ownership of the billboards
pursuant to the lease agreements. See 603 Ky.
Admin. Reg 10:021§ 2(3), (6). As a result, the
leases were not unenforceable based on
impossibility or impracticability.
LeMaster's final argument as to why the leases are
unenforceable is that Outfront breached the
agreements when it failed to pay rent for more
than thirteen years; therefore, it cannot enforce the
lease agreements now. Although the lease
agreements explicitly provide for the abatement of
rent under certain circumstances-and Outfront
followed the proper protocol for seeking
abatement of the rent-LeMaster contends that
abatement of the rent was only allowed under the
*15 lease agreements for "temporary" conditions
and that a thirteen-year tree obstruction was a
"condition of indefinite duration." (Appellants' Br.
24.)
15
Kentucky law provides that written terms in a
contract should be "enforced strictly," assuming
the language is unambiguous, and words in a
contract should be read pursuant to their "ordinary
meaning." Stowe v. Realco LLC, 551 S.W.3d 462,
465-66 (Ky. Ct. App. 2018) (internal quotation
marks and citations omitted). In interpreting
contracts, courts should seek to "give effect, if
possible, to the mutual intention of the parties,"
and words in the contract should be "construed in
the sense they are employed by the parties." N.
Star Co. v. Howard, 341 S.W.2d 251, 255 (Ky. Ct.
App. 1960). "The interpretation of a contract is a
question of law." Stowe, 551 S.W.3d at 465.
Here, the leases do not provide a separate
definition of the word "temporary" as used in the
termination and abatement provision. (R. 100-5,
Leases in Effect in 2016 at PageID # 1483.) The
ordinary meaning of the word "temporary" means
a condition lasting for a limited duration and not
permanently. Considering the word in the context
of this provision, the district court correctly
construed the term to allow Outfront discretion in
abating the rent pursuant to one of the triggering
conditions. The lease agreements permitted
Outfront to terminate the leases based on the
existence of one of several conditions, including
obstruction of the displays, diminished advertising
value, legal restrictions, inability to obtain
advertising contracts, or a diversion of traffic. And
the lease specifically provided Outfront the option
to abate rent when any of the above conditions
temporarily existed for the duration of the
condition's existence. Given this language and the
lack of a specific limitation on the time period
during which abatement of rent could last, this
provision demonstrates an intent by the parties to
allow Outfront to end or pause obligations under
the lease pursuant to conditions outside of its
control. *1616
Thirteen years may seem a long period of time,
but a thirteen-year tree obstruction is temporary
insofar as the trees could have been removed at
any time during that period by human
intervention, the state government, or even natural
disasters. Had Kentucky amended its regulations
to allow for more than routine maintenance of
9
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
nonconforming billboards, Outfront could have
removed the vegetation obstructing the displays,
and Outfront had been lobbying the Kentucky
Legislature to amend their regulations. Given its
hope that the regulations would be amended, the
company properly abated rent until such time as
the vegetation could be removed. And if the
Powells believed that abatement was improper
because the obstruction was a permanent
condition, they could have terminated the lease
prior to the next renewal date. Outfront did not
breach the leases by abating the rent pursuant to
the temporary condition of vegetation obstruction.
C. Abandonment of the Billboards
LeMaster contends that Outfront abandoned its
ownership of the billboards by allowing them to
fall into disrepair. Kentucky courts define
abandonment of property as "the relinquishment
of property with the intention of not reclaiming it
or reassuming its ownership or enjoyment." Kelley
v. Nationwide Auto Restoration, LLC, 246 S.W.3d
470, 473 (Ky. Ct. App. 2007). The elements of
abandonment are (1) "a voluntary relinquishment
of possession" and (2) "intent to repudiate
ownership." Greer v. Arroz, 330 S.W.3d 763, 765
(Ky. Ct. App. 2011). In determining whether an
owner has abandoned property, Kentucky courts
look to "the conduct of the parties, independently
of what they may claim was their mental attitude
with respect thereto." Cameron v. Lebow, 338
S.W.2d 399, 406 (Ky. Ct. App. 1960) (internal
quotation marks omitted), overruled on other
grounds as recognized in Carrs Fork Corp. v.
Kodak Mining Co., 809 S.W.2d 699 (Ky. 1991).
An "intent to repudiate ownership may be inferred
when the facts justify it, and the lapse of a long
period of time following relinquishment of
possession constitutes significant evidence of the
intention to abandon property." Kelley, 246
S.W.3d at 473. An owner who has abandoned
property cannot pursue a conversion claim for it,
C&H Mfg., 600 S.W.3d at 746, because "the
completed act of abandonment itself terminates
the leasehold interest." Cameron, 338 S.W.2d at
406. *17
9
17
9 LeMaster contends that photos of the
billboards at the time they were taken
down demonstrate that the obstructions in
front of the billboards had been removed
sometime between 2002 and 2016.
However, the district court properly
rejected the photos as not creating a
genuine dispute of material fact regarding
the visibility of the displays, given that the
photos were taken from a side road and
LeMaster failed to identify where and
when the photos were taken.
The Kentucky Court of Appeals "has previously
recognized a presumption of abandonment when a
commercial tenant turns over its lease to another
commercial tenant in the same business and leaves
behind equipment or personal property." C&H
Mfg., 600 S.W.3d at 746. In C&H Manufacturing,
the Kentucky Court of Appeals determined that
C&H Manufacturing abandoned its equipment
after leaving it at the facility it had previously
leased and failing to retrieve or make a demand
for the equipment in the eight to nine years
between leaving the lease and filing the
underlying complaint. *20 Id. at 747. Similarly, in
Goss v. Bisset, the previous tenant and the current
tenant both ran garage businesses, and the
previous tenant left behind equipment following
the end of their lease, for which they never
returned. 411 S.W.2d 50, 53 (Ky. Ct. App. 1967).
Given that the lessor had no ownership interest in
the equipment, and "[p]ossession passed directly
and immediately from one tenant to the other," the
court determined that the previous tenant intended
to abandon the equipment. Id. at 53-54. And, in
Greer, the Kentucky Court of Appeals determined
that former homeowners abandoned their personal
property left at the home after failing to make any
demand for the property until four years after the
home's judicial sale. 330 S.W.3d at 765-66. *18
20
18
10
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
In the present case, Outfront did not abandon the
billboards, and any conduct that might, at first
glance, seem to show an intent to abandon the
billboards was not voluntary on the part of
Outfront. Considering the various lease
agreements for the billboards, the three 1998
leases explicitly provide that the billboards "shall
not be considered abandoned at any time and shall
not become the property of [the Powells] except
by express conveyance in writing." (R. 100-5,
Leases in Effect in 2016 at PageID # 1486.)
Additionally, the 1983 and 1998 leases remained
in effect until either party provided written notice
of termination at least 60 or 90 days, respectively,
before the start of the next lease term, which
neither party did. All the leases contemplated
obstruction of the billboards and allowed for
Outfront to terminate the rent, or to abate rent
payments when such an obstruction occurred
temporarily.
LeMaster's contention that Outfront abandoned the
billboards by failing to sell advertising on any of
the five billboards since 2002 and failing to
maintain the billboards ignores the fact that these
consequences were the result of Kentucky
regulations, not Outfront's voluntary conduct.
Prior to 2015, Kentucky law prohibited cutting
down vegetation in front of a billboard on a state
right-of-way to make the billboard visible. See
Whiteco Metrocom Corp., 14 S.W.3d at 27.
Outfront lobbied the Kentucky Legislature to
change the law so that Outfront could remove the
vegetation from in front of the billboards, but it
was not successful until 2015 with the
promulgation of 603 Ky. Admin. Reg. 5:155. Until
then, Outfront could not sell any advertising
because the view of the billboards remained
obstructed, and it could not remove the
obstruction because that exceeded the scope of
any routine maintenance on the billboards. See
Whiteco Metrocom Corp., 14 S.W.3d at 27 (noting
that routine maintenance of nonconforming
advertising devices included "replacement of nuts
and bolts, nailing, riveting or welding, cleaning
and painting, or manipulating to level or plumb
the device;" "the routine change of message;" and
"[t]he lamination or preparation of existing panels
or facings at a location other than that of the
advertising device").
In the aforementioned cases where the Kentucky
Court of Appeals has found abandonment of
property, the previous owners left behind the
personal property at the close of their lease term or
ownership of the real property, which constituted
an act voluntarily relinquishing the personal
property and intending to repudiate their
ownership in that personal property. Cf. C&H
Mfg., 600 S.W.3d at 746-47. In contrast, in the
present case, Outfront maintained valid leases for
the area on which the billboards were built at the
time that the Powells purported to transfer
ownership of the billboards to LeMaster, and it
neither attempted to remove the billboards at any
point nor otherwise took any action that would
indicate either voluntary relinquishment or an
intent to repudiate ownership of the billboards. As
a result, the district court correctly found that
Outfront did not abandon the billboards.
Outfront retained legal title to the billboards at the
time that the Powells purported to transfer
ownership of the billboards to LeMaster because,
as a matter of law, the leases were enforceable and
Outfront did not abandon the billboards. Given
that on appeal LeMaster contests only the district
court's conclusion regarding the legal title element
of Outfront's conversion claim, we will not disturb
the district court's finding that Outfront sustained
its burden on summary judgment to establish all of
the conversion elements as a matter of law.10
10 Because we affirm the district court's grant
of summary judgment to Outfront on the
conversion claim, we similarly affirm its
denial of summary judgment as to
LeMaster on her counterclaim regarding
tortious interference with prospective
economic advantage. Outfront's assertion
of its rights under the lease agreements was
not improper, and LeMaster cannot make
11
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
out a tortious interference claim without
showing that Outfront acted wrongfully.
Additionally, LeMaster does not contest the
district court's exercise of discretion to
decline supplemental jurisdiction over
LeMaster's third-party complaint against
the Powells on appeal. Therefore, we also
affirm the district court's dismissal of the
third-party complaint.
CONCLUSION
For these reasons, we AFFIRM the district court's
judgment. *2121
12
Outfront Media, LLC v. Lemaster No. 20-5562 (6th Cir. Sep. 22, 2021)
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28 United States District Court Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
ELLEN LEE ZHOU, et al.,
Plaintiffs,
v.
OUTFRONT MEDIA, et al.,
Defendants.
Case No. 3:19-cv-07269-WHO
ORDER GRANTING BREED’S
MOTIONS TO DISMISS AND STRIKE
AND CLEAR CHANNEL’S MOTION
TO DISMISS
Re: Dkt. Nos. 25, 28, 32
In October 2019, plaintiffs Ellen Lee Zhou and the Asian American Freedom Political
Action Committee (“AAFPAC”) (collectively, “plaintiffs”) posted two billboard advertisements in
support of Zhou’s campaign for mayor of the City and County of San Francisco. Defendant
London Breed, then the mayor and a candidate in the race, denounced the billboards as
disrespectful and divisive, and her supporters called for their removal. Defendant media
companies Clear Channel Outdoor, LLC and Clear Channel Outdoor Holdings, Inc. (collectively,
“Clear Channel”) and OutFront Media, Inc. soon removed the billboards.
The following month, Zhou and AAFPAC initiated this action alleging claims arising out
of their First Amendment free speech rights and their contracts with the media companies. Before
me are Breed’s and Clear Channel’s motions to dismiss and special motions to strike the claims
against them. The plaintiffs’ claims are inadequately pleaded, arise from protected activity, and
are unlikely to succeed on the merits. I will therefore grant the motions in their entirety and award
Breed her attorney fees on the Anti-SLAPP motion. Because the plaintiffs indicated at the virtual
hearing that they do not have additional facts to allege that could cure the deficiencies that I have
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28 United States District Court Northern District of California identified, I will not grant leave to amend.1
BACKGROUND
Zhou was a candidate for mayor of San Francisco running against Breed in the November
2019 election. First Amended Complaint (“FAC”) [Dkt. No. 10] ¶¶ 13, 18. AAFPAC is an
independent expenditure committee. Id. ¶ 14.
On October 1, 2019, Zhou entered into a contract with OutFront to purchase a billboard
advertisement to be displayed in San Francisco at the corner of Dore and Howard Streets. Id. ¶ 20,
Ex. A (OutFront Contract). OutFront approved the advertisement, which displayed an African
American woman in a red strapless dress, sitting with her legs up and high heels off, holding a
cigar and a cash register, and daydreaming about people with numbers around their necks. Id. ¶
24; Breed Request for Judicial Notice (RJN)2 Ex. A (OutFront Billboard) [Dkt. No. 26-1]. The
text read, “Ellen Zhou for mayor.” Breed RJN Ex. A.
On September 30, 2019, AAFPAC entered into a contract with Clear Channel to purchase
billboard advertisements to be displayed in San Francisco. FAC ¶ 22, Ex. B; Clear Channel RJN
Ex. 1 (CC Contract) [Dkt. No. 32-2].3 Clear Channel approved the advertisements AAFPAC
wished to display. FAC ¶ 24. One of AAFPAC’s billboards showed Breed driving a red bus with
the text “Werewolves of London Tours” near cars with smashed windows. Breed RJN Ex. B (CC
Billboard) [Dkt. No. 26-2]. Additional text read, “Vote Nov. 5 for Super Mayor Ellen Lee Zhou!”
Id.
1 The plaintiffs indicated that they would amend only to make specific allegations regarding the
duty of good faith and fair dealing and to plead that the proof is in the defendants’ hands. As
described below, neither of these additions could save their claims.
2 Breed requests judicial notice of photographs of the advertisements, see Dkt. No. 26, and Clear
Channel requests judicial notice of its complete contract with AAFPAC, see Dkt. No. 32-2. The
plaintiffs do oppose these requests. Judicial notice is appropriate; the requests are GRANTED.
See United States ex rel. Lee v. Corinthian Colls., 655 F.3d 984, 999 (9th Cir. 2011) (noting that
courts can consider evidence not attached to a complaint but “on which the complaint ‘necessarily
relies’ if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's
claim; and (3) no party questions the authenticity of the document”).
3 Clear Channel asserts, and the plaintiffs do not dispute, that the FAC attachment includes only
one page of its three-page contract with AAFPAC. Clear Channel’s request for judicial notice
includes the entire contract.
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28 United States District Court Northern District of California Clear Channel and OutFront posted the billboards in October 2019. FAC ¶ 25. Soon after,
Breed and her allies “began a concerted effort” to pressure Clear Channel and OutFront to remove
the billboards by denouncing them as offensive, racist, and divisive. Id. ¶ 26. Breed’s campaign
publicized an October 21, 2019 press conference in front of the OutFront billboard, although
Breed did not attend it. Id. ¶¶ 27–28. Those present, including State Assemblyman David Chiu
and members of the Board of Supervisors, denounced the content of the billboard and called for its
removal. Id. ¶¶ 29–31. News outlets reported various individuals describing the contents of the
billboard as racist, misogynistic, and sexist, and opining that it had no place in San Francisco. Id.
¶¶ 31–35. Breed gave a media interview in which she said, “‘[The billboard] is hurtful, it’s
disrespectful and it is no place [sic], I think in San Francisco for that kind of divisiveness.’” Id. ¶
36.
According to the plaintiffs, through these actions Breed censored their speech under color
of state law. Id. ¶ 37. On October 22, 2019, one day after the press conference, OutFront took
down Zhou’s billboard. Id. ¶ 38. Soon after, Clear Channel and OutFront had taken down all the
plaintiffs’ billboards. Id. Clear Channel told a television station that it removed the billboards
because it reserves the right to remove advertising that is offensive to community standards. Id. ¶
39. Although Clear Channel and OutFront indicated that they would accept further
advertisements, they eventually stopped responding to the plaintiffs’ communications. Id. ¶ 40.
The plaintiffs initiated this action on November 4, 2019. Their January 15, 2020 First
Amended Complaint alleges the following claims: (i) a Section 19834 claim against all the
defendants for violations of the First Amendment; (ii) a breach of contract claim against Clear
Channel and OutFront; (iii) inducing breach of contract against Breed; and (iv) intentional
interference with contractual relations against Breed. In response, Breed filed a motion to dismiss
and a special motion to strike. Breed Motion to Dismiss the First Cause of Action (“Breed MTD”)
[Dkt. No. 25]; Breed Anti-SLAPP Motion to Strike (“Breed MTS”) [Dkt. No. 28]. Clear Channel
also filed a motion to dismiss, and, in the alternative, a special motion to strike. Clear Channel
4 The FAC lists Section 1982, but the plaintiffs’ opposition to the instant motions corrects the error
and lists Section 1983.
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28 United States District Court Northern District of California Motion to Dismiss (“CC MTD”) [Dkt. No. 32].
LEGAL STANDARD
I. MOTION TO DISMISS
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint
if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). To survive a
12(b)(6) motion, the plaintiff must allege “enough facts to state a claim to relief that is plausible
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). A claim is facially plausible
when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citation omitted). There must be “more than a sheer possibility that a defendant has acted
unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff
must allege facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550
U.S. at 555, 570.
In deciding whether the plaintiff has stated a claim upon which relief can be granted, the
court accepts the plaintiff’s allegations as true and draws all reasonable inferences in favor of the
plaintiff. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court is
not required to accept as true “allegations that are merely conclusory, unwarranted deductions of
fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.
2008). If the court dismisses the complaint, it “should grant leave to amend even if no request to
amend the pleading was made, unless it determines that the pleading could not possibly be cured
by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).
II. ANTI-SLAPP MOTION TO STRIKE
California Code of Civil Procedure section 425.16 is California’s response to “strategic
lawsuits against public participation,” or SLAPP lawsuits. It was enacted “to provide a procedure
for expeditiously resolving nonmeritorious litigation meant to chill the valid exercise of the
constitutional rights of freedom of speech and petition in connection with a public issue.” Hansen
v. California Dep’t of Corr. & Rehab., 171 Cal. App. 4th 1537, 1542-43 (2008). It provides that a
cause of action against a person “arising from any act of that person in furtherance of the person’s
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28 United States District Court Northern District of California right of petition or free speech under the United States Constitution or the California Constitution
in connection with a public issue shall be subject to a special motion to strike, unless the court
determines that the plaintiff has established that there is a probability that the plaintiff will prevail
on the claim.” Cal. Civ. Proc. Code § 425.16(b)(1). An “act in furtherance of the person’s right of
petition or free speech under the United States Constitution or the California Constitution in
connection with a public issue” includes:
(1) any written or oral statement or writing made before a legislative, executive,
or judicial proceeding, or any other official proceeding authorized by law,
(2) any written or oral statement or writing made in connection with an issue
under consideration or review by a legislative, executive, or judicial body,
or any other official proceeding authorized by law,
(3) any written or oral statement or writing made in a place open to the public
or a public forum in connection with an issue of public interest, or
(4) any other conduct in furtherance of the exercise of the constitutional right of
petition or the constitutional right of free speech in connection with a public
issue or an issue of public interest.
Cal. Civ. Proc. Code § 425.16(e).
“When served with a SLAPP suit, the defendant may immediately move to strike the
complaint under Section 425.16.” Hansen, 171 Cal. App. 4th at 1543. That motion is known as
an Anti-SLAPP motion. To determine whether an Anti-SLAPP motion should be granted, the trial
court must engage in a two-step process. “First, the defendant must make a prima facie showing
that the plaintiff’s suit arises from an act in furtherance of the defendant’s rights of petition or free
speech.” Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 595 (9th Cir. 2010) (citation and
internal quotation marks omitted). “Second, once the defendant has made a prima facie showing,
the burden shifts to the plaintiff to demonstrate a probability of prevailing on the challenged
claims.” Id. “[T]he anti-SLAPP statute cannot be used to strike federal causes of action.” Hilton
v. Hallmark Cards, 599 F.3d 894, 901 (9th Cir. 2010).
DISCUSSION
Both Breed and Clear Channel argue that all of the plaintiffs’ claims against them should
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28 United States District Court Northern District of California be dismissed without leave to amend or stricken under California’s Anti-SLAPP statute.5
I. MOTIONS TO DISMISS
Breed and Clear Channel move to dismiss the first cause of action for violation of the First
Amendment, and Clear Channel moves to dismiss the second cause of action for breach of
contract.
A. First Cause of Action: First Amendment
Both Breed and Clear Channel move to dismiss on the grounds that the FAC does not
adequately plead state action, a necessary predicate to a First Amendment violation.6 See Breed
MTD 8–10; CC MTD 5–9. Breed also argues that her conduct as alleged in the FAC cannot give
rise to a First Amendment violation because the First Amendment protects her speech. Breed
MTD 5–7.
1. Whether plaintiffs properly plead state action
“A threshold requirement of any constitutional claim is the presence of state action.”
Roberts v. AT&T Mobility LLC, 877 F.3d 833, 837 (9th Cir. 2017) (internal quotation marks and
citation omitted). This requirement “‘avoids imposing on the State, its agencies or officials,
responsibility for conduct for which they cannot fairly be blamed.’” Id. (quoting Lugar v.
Edmondson Oil Co., 457 U.S. 922, 936 (1982)). There is a presumption that private conduct is not
state action. Sutton v. Providence St. Joseph Med. Ctr., 192 F.3d 826, 835–36 (9th Cir. 1999)
(noting that “something more” is required, whether it be “(1) public function, (2) joint action, (3)
governmental compulsion or coercion, [or] (4) governmental nexus”).
Plaintiffs allege two theories of state action in support of their first cause of action. First,
they argue that Breed and her allies “pressured and encouraged” Clear Channel and OutFront
5 As an initial matter, the plaintiffs criticize Breed for responding to the FAC in her official
capacity rather than her individual capacity and ask that I deny her motions on that basis alone.
Oppo. MTD 24–25; Oppo. MTS 26. The FAC does not indicate an intent to sue Breed in her
personal capacity, and in any event, the capacity in which the plaintiffs sue Breed has no bearing
on the merits of the motions before me.
6 At the hearing, Clear Channel further argued that the plaintiffs failed to plead that Breed took
any action under color of state law for purposes of a Section 1983 claim because she acted as a
candidate for mayor rather than as the mayor.
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28 United States District Court Northern District of California Media to suppress Plaintiffs’ speech. Oppo. MTD 8. Second, they allege that Clear Channel and
OutFront acted to secure the goodwill of the government because they are subject to government
regulation.
a. Significant encouragement theory
“[A] State normally can be held responsible for a private decision only when it has
exercised coercive power or has provided such significant encouragement, either overt or covert,
that the choice must in law be deemed to be that of the State.” Blum v. Yaretsky, 457 U.S. 991,
1004 (1982). “Action taken by private entities with the mere approval or acquiescence of the
State is not state action.” Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 52 (1999).
In R.C. Maxwell Co. v. New Hope, 735 F.2d 85 (3d Cir. 1984), the Third Circuit affirmed
summary judgment in favor of a town on the grounds that a landlord’s request that the plaintiff
remove billboards from the leased property did not constitute state action for purposes of a First
Amendment claim. The town sent a letter to the plaintiff’s landlord “politely but firmly”
suggesting removal of the billboards, mentioning a draft ordinance that would prohibit billboards,
and referencing legal action. Id. at 86. When the landlord instructed the plaintiff company to
remove the billboards, it refused and instead filed suit, alleging (among other claims) that the town
infringed its free speech rights by “by indirectly and informally exerting its sovereign power” to
coerce the landlord into removing the billboards. Id. at 87. The Third Circuit disagreed and
concluded that the letter and follow-up correspondence could not be considered coercive. Id. at
88. The landlord’s “nebulous desire” to stay in the town council’s good graces was not enough to
give rise to a constitutional claim. Id. at 89.
Here, the plaintiffs argue that Clear Channel’s and OutFront’s decisions to remove the
billboards are attributable to the state because of Breed’s significant encouragement of their
removal. The plaintiffs allege that Breed’s campaign publicized the October 21 press conference,
where Breed’s allies in city government described the contents of the billboards as racist and
misogynistic and called for their removal. FAC ¶¶ 29, 32, 35. Breed said that the billboards were
“hurtful” and “disrespectful” and that they had no place in San Francisco. Id. ¶ 36.
These allegations are insufficient to show state action for purposes of a First Amendment
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28 United States District Court Northern District of California claim against either Breed or Clear Channel. They do not show that Breed provided “such
significant encouragement” that the companies’ decisions were effectively government decisions.
There are no allegations that any comments, by Breed or anyone else, were directed at Clear
Channel or OutFront. No one threatened legal action or any other negative ramifications to
encourage removal of the billboards. The conduct in the cases cited by the parties stands in sharp
contrast. See, e.g., Carlin Commc'ns, Inc. v. Mountain States Tel. & Tel. Co., 827 F.2d 1291, 1295
(9th Cir. 1987) (affirming state action where a deputy county attorney threatened prosecution if a
private party failed to comply with his demands). The conduct alleged here is far from enough to
be considered coercive or so significantly encouraging that the billboard removal could be
attributed to the state.7
b. Regulation theory
The FAC also pleads that Clear Channel and OutFront have earned revenue from
conducting business in San Francisco and that their “business interests are subject to extensive
regulation by San Francisco and the State of California.” FAC ¶¶ 42-43. But the Supreme Court
has been clear that regulation by itself—even where it is extensive and specific—does not
transform private action into state action. See Jackson v. Metro. Edison Co., 419 U.S. 345, 350
(1974) (noting that regulation alone is not enough); Blum v. Yaretsky, 457 U.S. 991, 1008–09
(1982) (determining that regulations requiring that nursing home patients be transferred to less
expensive facilities where possible did not make the state responsible for any particular patient
transfers); Rendell-Baker v. Kohn, 457 U.S. 830, 841 (1982) (noting that while the private school
was subject to extensive regulation, its discharge decisions “were not compelled or even
influenced by any state regulation”). The generally applicable regulations that plaintiffs refer to
are a far cry from allegations that could establish that the decisions to take down the billboards
were effectively the state’s.
7 Even if the plaintiffs had alleged enough to make Breed liable for Clear Channel’s or OutFront’s
decisions, they would need to allege “some other nexus” to make the private entities liable under
the First Amendment. See Sutton v. Providence St. Joseph Med. Ctr., 192 F.3d 826, 838 (9th Cir.
1999) (“[I]n a case involving a private defendant, the mere fact that the government compelled a
result does not suggest that the government’s action is ‘fairly attributable’ to the private
defendant.”).
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28 United States District Court Northern District of California Contrary to the plaintiffs’ argument, this determination is appropriate at the pleading stage.
See Oppo. MTD 9 (arguing that Breed and Clear Channel place too high a burden on them at the
pleading stage and noting that R.C. Maxwell was a ruling on summary judgment). For plaintiffs to
proceed with their claims, they must plead facts that, taken as true, could establish that the
defendants engaged in unconstitutional conduct. They have failed to do so.
2. Whether Breed’s conduct is actionable
Dismissal is also appropriate because Breed’s speech could not have amounted to a First
Amendment violation. “[P]ublic officials may criticize practices that they would have no
constitutional ability to regulate, so long as there is no actual or threatened imposition of
government power or sanction.” Am. Family Ass’n v. City & Cty. of S.F., 277 F.3d 1114, 1124–25
(9th Cir. 2002) (indicating agreement with and citing cases from a “host” of other circuits).
In American Family, where city officials had criticized anti-gay speech and adopted
resolutions urging television stations not to air it, the Ninth Circuit affirmed dismissal of a free
speech claim because there was “no sanction or threat of sanction” against the speakers or the
stations if they refused to comply. See id. The same is true of Breed’s response to the billboards,
which itself was significantly less critical than the condemnation at issue in American Family. See
id. at 1119–20. The plaintiffs do not allege that Breed’s critical and disapproving comments were
accompanied by any threat of government power or sanction against them or Clear Channel and
OutFront. Their attempts to distinguish American Family are unpersuasive. See Oppo. MTD 16
(asserting that by contrast with American Family, their claims are based on “specific and tangible
actions”).
B. Second Cause of Action: Breach of Contract
Clear Channel moves to dismiss the breach of contract claim on the ground that it acted
within the unambiguous terms of its agreement with AAFPAC8 when it took down its billboard
advertisement. CC MTD 9–11. The contract is governed by New York law. RJN Ex. 1 ¶ 8(a).
To state a claim for breach of contract under New York law, a plaintiff must allege: “(i) the
8 Although the FAC does not specify that only AAFPAC brings second cause of action, it
indicates that only AAFPAC entered into a contract with Clear Channel. See FAC ¶ 22.
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28 United States District Court Northern District of California existence of a contract, (ii) the plaintiff’s performance under the contract, (iii) the defendant’s
breach of that contract, and (iv) resulting damages. JP Morgan Chase v. J.H. Elec. of N.Y., Inc.,
893 N.Y.S.2d 237, 239 (App. Div. 2nd Dept.).
AAFPAC alleges that Clear Channel violated the contract when it removed the billboard
because of government pressure and never explained the reversal of its earlier approval of the
advertisement. See FAC ¶¶ 38, 41. It contends that Clear Channel “failed to follow through” on
assurances that they would accept further advertisements and instead stopped communicating with
AAFPAC. Id. ¶ 40.
These allegations are insufficient to state a claim for breach because of the following term
in the parties’ agreement: “Clear Channel, at its sole discretion, may reject or remove any
advertising material, art or copy, submitted by Customer for any reason or no reason at any time
during the term of this Contract.” CC Contract ¶ 3.2(a). This unambiguous term precludes a
breach of contract claim based on the conduct alleged. See Taylor v. T-Mobile USA, Inc., No. 14-
cv-4965, 2015 U.S. Dist. LEXIS 5504, at *7 (S.D.N.Y. Jan. 16, 2015) (dismissing a breach of
contract claim where a clear and unambiguous provision permitted cancellation “‘for any reason
or no reason’”); see also Slamow v. Delcol, 571 N.Y.S.2d 335, 335–36 (App. Div. 2nd Dept.
1991) (“[W]hen the terms of a written contract are clear and unambiguous, the intent of the parties
must be found within the four corners of the contract . . . .”). The contract clearly permitted it to
remove the advertisement “for any reason or no reason.”
In response to Clear Channel’s motion, AAFPAC raises a theory that its FAC does not
include: by removing the advertising, Clear Channel breached the covenant of good faith and fair
dealing. See MTD Oppo. 22–23. They ask for leave to amend to add these allegations. MTD
Oppo. 16–17. But dismissal is appropriate even if AAFPAC had pleaded this claim. The
covenant of good faith and fair dealing cannot operate to alter the express terms of a written
agreement. See Nasdaq, Inc. v. Exch. Traded Managers Grp., 2019 U.S. Dist. LEXIS 220135, at
*179 (S.D.N.Y. Dec. 20, 2019) (“[T]he covenant of good faith and fair dealing cannot be
construed so broadly as effectively to nullify other express terms of a contract, or to create
independent contractual rights.”) (applying New York Law) (internal quotation marks and citation
Case 3:19-cv-07269-WHO Document 45 Filed 05/26/20 Page 10 of 13
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28 United States District Court Northern District of California omitted); see also Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389 (1995) (“[N]o obligation can
be implied that would be inconsistent with other terms of the contractual relationship.”) (internal
quotation marks and citation omitted). The unambiguous contract language shows that Clear
Channel had the right to remove the billboard; doing so could not have been a breach.9
II. ANTI-SLAPP MOTION TO STRIKE
Breed moves to strike the third and fourth causes of action under California’s Anti-SLAPP
law and requests attorney fees. Accordingly, I will engage in the two-step process such motions
require.
At step one, the question is whether protected activity “underlies or forms the basis for the
claim[s]” against Breed. Park v. Bd. of Trustees of California State Univ., 2 Cal. 5th 1057, 1062
(2017). Breed’s conduct as alleged in the FAC clearly arises from protected speech; the plaintiffs
do not argue otherwise. See Citizens United v. FEC, 558 U.S. 310, 339 (2010) (“The First
Amendment has its fullest and most urgent application to speech uttered during a campaign for
political office.”) (internal quotation marks omitted); McIntyre v. Ohio Elections Comm’n, 514
U.S. 334, 346 (1995) (“[Political speech] occupies the core of the protection afforded by the First
Amendment.”).
Accordingly, the analysis proceeds to step two, and the claims can proceed only if the
plaintiffs show a likelihood of success on the merits. The third cause of action for inducing breach
of contract requires: “(1) that [the plaintiff] had a valid and existing contract, (2) that the defendant
had knowledge of the contract and intended to induce its breach, (3) that the contract was in fact
breached by the other contracting party, (4) that the breach was caused by the defendant’s
unjustified and wrongful conduct, and (5) that plaintiff has suffered damage.” Charles C.
Chapman Bldg. Co. v. Cal. Mart, 2 Cal. App. 3d 846, 853 (1969). The fourth cause of action for
intentional interference with contractual relations requires: “a valid contract between plaintiff and
a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed
9 In the alternative to its motion to dismiss, Clear Channel moves to strike the second cause of
action under California’s Anti-SLAPP statute. Because dismissal is appropriate under Rule
12(b)(6), I do not address this argument.
Case 3:19-cv-07269-WHO Document 45 Filed 05/26/20 Page 11 of 13
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28 United States District Court Northern District of California to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of
the contractual relationship; and (5) resulting damage.” United Nat’l Maint., Inc. v. San Diego
Convention Ctr., 766 F.3d 1002, 1006 (9th Cir. 2014).
The plaintiffs’ allegations fail to state a claim for either cause of action. They are deficient
in three respects. First, both causes of action require a showing of “wrongful and unjustified”
conduct. The plaintiffs argue that Breed’s conduct was wrongful and unjustified because it
violated their First Amendment rights. Oppo. MTS 17–18. But for the reasons stated above, the
plaintiffs have failed to plausibly allege that the removal of the billboards can fairly be attributed
to the state. Second, both causes of action require a showing of breach. As explained above, the
plaintiffs have failed to adequately plead that Clear Channel breached its contracts with AAFPAC,
and according to Zhou, the “same analysis” applies to her contract with OutFront, who has not
appeared.10 MTD Oppo. 15–16. Third, plaintiffs fail to allege that Breed knew of the contracts
and had any intent to breach them. All of these reasons make it appropriate to strike these claims,
which arise from Breed’s protected political speech.
Further, Breed is entitled to attorney fees for work related to the claims I have stricken.
See Cal. Code Civ. Proc. § 415.16(c)(1)) (“[A] prevailing defendant on a special motion to strike
shall be entitled to recover his or her attorney’s fees and costs.”); U.S. ex rel. Newsham v.
Lockheed Missiles & Space Co., 190 F.3d 963, 971 (9th Cir. 1999) (applying the provision to state
claims brought in federal court). She requests a total of $22,200, for 34.4 hours spent on the
motion and 10 hours spent on the reply at a rate of $500.11 See Declarations of Tara M. Steeley
[Dkt. Nos. 29, 41]. The plaintiffs have not opposed Breed’s request for fees or challenged these
10 That contract is governed by Arizona law. FAC Ex. A § 7. The plaintiffs again raise a theory of
breach not alleged in the FAC, namely breach of the covenant of good faith and fair dealing.
Breed argues that the following term from the OutFront contract operates in the same way as the
term in the Clear Channel contract analyzed above: “[I]f adverse publicity results from any
display, [OutFront] shall have the right to remove advertisement and, at its option, either terminate
this Contract or request a new acceptable advertisement copy . . . .” Id. § 6. That determination
will await OutFront’s appearance and motion. For purposes of Breed’s Anti-SLAPP motion, the
pleading insufficiencies outlined here are enough.
11 Breed’s request reflects a 20% reduction of hours spent on the opening motion and does not
seek compensation for time spent by attorneys other than Steeley.
Case 3:19-cv-07269-WHO Document 45 Filed 05/26/20 Page 12 of 13
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28 United States District Court Northern District of California hours or this rate, both of which I find reasonable.
CONCLUSION
Because the plaintiffs stated at the hearing that they have no additional facts to allege that
could cure these deficiencies, the motions are GRANTED WITH PREJUDICE. The plaintiffs are
ORDERED to pay Breed $22,200 in attorney fees. Judgment will be entered after final resolution
of the claims against OutFront.
IT IS SO ORDERED.
Dated: May 26, 2020
William H. Orrick
United States District Judge
Case 3:19-cv-07269-WHO Document 45 Filed 05/26/20 Page 13 of 13
Office of the City Attorney 203 South Troy Street
Royal Oak, MI 48067
Approval of Settlement and Release Agreement
Outfront Media v City of Royal Oak
November 2, 2020
The Honorable Mayor Fournier and
Members of the City Commission:
Subject to the approval of the city commission, my office has negotiated a settlement in this
litigation, which arises out of the zoning board of appeal’s November 14, 2019 decision to deny
an application from Outfront Media for two variances to allow the construction of a billboard on
commercial property at 5060 Coolidge Highway.
Prior Litigation
There has been prior litigation between the parties related to a billboard at this location, which is
the site of a large self-storage facility. In 2011, CBS Outdoor made application for special land
use approval for the construction of a two-sided billboard on the southwest corner of the
property. When the application was denied, CBS Outdoor filed suit in federal court, alleging that
the city’s special land use requirement and process were unconstitutional. The federal court
granted CBS Outdoor partial summary disposition, finding that the special land use criteria
contained in the zoning ordinance (which has since been amended) was vague, ambiguous,
and arbitrary. Following a court-ordered facilitation in 2013, the city and CBS Outdoor entered
into a settlement that allowed the billboard to be constructed. As part of the settlement, CBS
Outdoor agreed to provide the city with free advertising and messaging space ten weeks per
year on either the Coolidge billboard or one of its other billboards in southeastern Michigan.
In 2014, CBS Outdoor spun off from CBS Outdoor and rebranded itself as Outfront Media
(“Outfront”). Outfront and the city continued to operate under the 2013 settlement agreement
until 2018, when Public Storage expanded its facility to encompass the site of the billboard and
terminated Outfront’s lease. For a period of time, Outfront continued to give the city messaging
space on its other billboards, even though there was no longer a billboard on the Public Storage
site.
Current Litigation
Last October, Outfront applied for the two variances needed to install the billboard on the
northwest corner of the site, subject to the terms of the 2013 settlement agreement. Following a
public hearing on the application on November 14, 2019, the zoning board of appeals denied
Outfront’s application. On December 9, 2019, Outfront filed a claim of appeal from the zoning
board’s decision in Oakland County Circuit Court.
On July 30, 2020, Circuit Court Judge Leo Bowman issued an opinion and order reversing the
zoning board and remanding the case for a new hearing. He found that the zoning board failed
to properly consider if there were practical difficulties that existed. According to Judge Bowman,
the city’s decision to approve the expansion of the self-storage facility had directly impacted
Outfront’s rights under the 2013 settlement agreement. The court further found that the
decision to deny the variances was a violation of the settlement agreement.
On August 19, 2020, my office filed a motion for reconsideration. On August 27, 2020, the court
denied the motion. Judge Bowman expressly re-affirmed his finding that the zoning board’s
decision to deny Outfront’s two non-use variances violated the terms of the 2013 settlement
agreement.
Settlement Proposal
After the city’s motion for reconsideration was denied, counsel for Outfront Media contacted my
office and asked if the city had any interest in settling the case consistent with the settlement in
the earlier federal court litigation. More specifically, if the city will allow Outfront to construct the
billboard in the new location on the site, Outfront will provide the city with the same amount of
free advertising and messaging space as it had been given under the earlier settlement
agreement.
In the interest of avoiding the time and expense of further proceedings before the zoning board
of appeals and possible further litigation, we would recommend that the city commission
approve the settlement (Attachment 1). The following resolution is recommended for approval:
Be it resolved, the city commission hereby approves the proposed settlement
and release agreement with Outfront Media, LLC, subject to final review and
approval of the agreement by the city attorney.
Respectfully submitted,
David W. Gillam
City Attorney
1 Attachment
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement is entered into this ____ day of
November, 2020 by and between OUTFRONT MEDIA, LLC, a Delaware Limited
Liability Company with offices at 88 Custer, Detroit, MI 48202 (“Outfront”) and the CITY
OF ROYAL OAK, a Michigan Municipal Corporation with offices at 203 S. Troy Street,
Royal Oak, Michigan 48067 (the “City”).
RECITALS
1. Outfront filed an application with the City on or about October 7, 2019 for two
variances to allow the placement of a billboard at 5060 Coolidge Highway, Royal
Oak, Michigan.
2. After a public hearing on November 14, 2019, the City’s Zoning Board of Appeals
denied Outfront’s application.
3. On or about December 9, 2019, Outfront filed a Claim of Appeal from the Zoning
Board’s decision in the Oakland County Circuit Court pursuant to MCL 125.3605
and MCL 125.3606 (Case No. 2019-178402-AV).
4. On July 30, 2020, the Circuit Court entered an Opinion and Order reversing the
Zoning Board of Appeals and remanding the matter to the Zoning Board for a
new hearing.
5. Outfront and the City seek to resolve this dispute in order to avoid the time,
expense and uncertainty of a new hearing and possible further litigation, and to
dispose of and mutually release all claims that were asserted or could have been
asserted in regards to Outfront’s application.
Attachment 1
2
AGREEMENT
In consideration for the mutual promises contained herein, the sufficiency of
which is hereby acknowledged, Outfront and the City agree as follows:
1. This Settlement and Release Agreement concerns property located at 5060
Coolidge Highway, Royal Oak, Michigan (Parcel ID #72-20-32-301-032) (the
“Property”).
2. Subject to the City’s normal Building Department permitting process, Outfront
shall be allowed to construct a billboard on the Property, as depicted in Exhibit A
(the “Billboard”).
3. The Billboard shall be placed on the northwest corner of the Property, as
depicted on the site plan attached as Exhibit B (the “Site Plan”).
4. In placing the Billboard on the Property, Appellant shall comply with all other
applicable requirements of the Royal Oak City Code as of the date of Outfront’s
application.
5. The display unit on the Billboard will portray a static message that may change
no more frequently than one every eight (8) seconds (eight times per minute).
The display unit will not incorporate animation, flashing, scrolling, oscillating,
dimming, or blinking displays.
6. The display unit will be equipped with photosensitive equipment which
automatically adjusts the display for brightness and contrast in relation to
ambient outdoor illumination. Outfront will make reasonable adjustments for
brightness and contrast at the direction of the City and will, in good faith, work
with the City to address any concerns regarding the digital display.
Attachment 1
3
7. The Billboard may display advertising for beer and wine, but not for liquor, higher
proof alcohol (beyond beer or wine), or any sexually oriented business.
8. Without charge, Outfront will provide the City advertising/messaging space (one
eight-second slot every sixty-four seconds) ten (10) weeks per annum in one (1)
week blocks to be used on the display unit and/or at the City’s request on any
other digital display unit operated by Outfront in Southeast Michigan (when
advertising/messaging space is available). The City’s advertising/messaging
shall be displayed in one (1) week (seven-day) blocks. The City shall provide
sixty (60) days’ notice of the advertising/message run date and the location of the
digital display on which the advertising/message is requested to run. The City
shall provide Outfront the advertising/message content and Outfront shall create,
subject to the City’s approval, the advertising/message display. Outfront shall
provide the City with the location of every other digital display unit operated by
Outfront in southeast Michigan and with the name and contact information of
each of Outfront’s representatives necessary to arrange advertising/messaging
time, location, and display.
9. In addition to the advertising/messaging time identified in Paragraph 8 above,
Outfront shall coordinate with the City and State and national authorities to
display when appropriate emergency information, including Amber Alerts, natural
disasters, terrorist attacks, and other information important to the traveling public.
These emergency messages shall be displayed according to the protocols of the
issuing agency, which may interrupt (in part) advertising/messaging time
Attachment 1
4
available to Outfront and all other advertisers displaying advertising/messaging at
the time that the emergency message is run.
10. Outfront shall provide the City with the name and contact information of a
representative available twenty-four (24) hours per day, seven (7) days per week,
to respond to requests for emergency service and/or to turn off or repair the
digital display units.
11. Outfront will not apply nor seek to erect any other billboard within the municipal
boundaries of the City of Royal Oak, unless the City modifies Section 770-57 of
its Code of Ordinances to expand the locations where billboards may be erected
or to reduce the spacing requirements to allow additional billboard construction
within the municipal boundaries of the City of Royal Oak.
12. In entering into this Agreement, Outfront forever releases and discharges the City
of Royal Oak, its elected and appointed officials, all employees and volunteers,
all boards, commissions and/or authorities and their board members, employees
and volunteers (including the City’s Zoning Board of Appeals and its members)
from any and all liability, claims, demands, controversies, damages, actions and
causes of action which Outfront, its heirs, personal representatives, successors
and assigns can, shall or may have by reason of or incident to Outfront’s October
7, 2019 application for a sign variance.
13. This Agreement may only be modified by written agreement of the parties, or
their successors in interest.
14. The terms of this Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, successors, transferees, and assigns.
Attachment 1
5
WITNESS OUTFRONT MEDIA, LLC
______________________________ ______________________________
By:
Its:
STATE OF _______________________)
)
COUNTY OF _____________________ )
On this _____ day of November, 2020, personally appeared before me
______________________________, who, being first duly sworn, deposes and states
that he/she executed the foregoing Release and Settlement Agreement as a free act
and deed.
Subscribed and sworn to before me this _____ day of November 2020
________________________________________
Notary Public, State of ______________________
My Commission Expires: ____________________
Acting in the County of ______________________
Attachment 1
6
WITNESS CITY OF ROYAL OAK
______________________________ ______________________________
Michael Fournier, Mayor
______________________________ ______________________________
Melanie Halas, City Clerk
STATE OF _______________________)
)
COUNTY OF _____________________ )
On this _____ day of November, 2020, personally appeared before me Michael
Fournier and Melanie Halas, who, being first duly sworn, deposes and states that
he/she executed the foregoing Release and Settlement Agreement as a free act and
deed.
Subscribed and sworn to before me this _____ day of November 2020
________________________________________
Notary Public, State of ______________________
My Commission Expires: ____________________
Acting in the County of ______________________
Attachment 1
Exhibit 1 Attachment 1
Exhibt 2Attachment 1
Court United States Court of Appeals (Georgia)
Writing for the Court Barnes, Presiding Judge.
Citation 847 S.E.2d 597,356 Ga.App. 405
Parties OUTFRONT MEDIA, LLC v. CITY OF SANDY SPRINGS.
Decision Date 18 August 2020
Docket Number A20A1269, A20A1420
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Outfront Media, LLC v. City of Sandy Springs, A20A1269, A20A1420
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Document Cited authorities 48 Cited in 3 Precedent Map Related Vincent
356 Ga.App. 405
847 S.E.2d 597
OUTFRONT MEDIA, LLC
v.
CITY OF SANDY SPRINGS.
A20A1269, A20A1420
Court of Appeals of Georgia.
August 18, 2020
847 S.E.2d 602
Scott William Peters, Sarah Richards Smith, Atlanta, for Appellant in A20A1269.
Daniel William Lee, La Grange, Matthew Michael Weiss, for Appellee in A20A1269.
J. Carole Thompson Hord, Scott William Peters, Sarah Richards Smith, Jonathan
Andrew Akins, Atlanta, for Appellant in A20A1420.
Daniel William Lee, La Grange, Matthew Michael Weiss, for Appellee in A20A1420.
Barnes, Presiding Judge.
356 Ga.App. 405
These companions appeals arise out of a dispute between the City of Sandy
Springs and Outfront Media, LLC regarding whether the City was entitled to
dispossess Outfront from property upon which Outfront leased space for operating
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certain billboards, whether Outfront was entitled to compensation from the City for
its interests in the property, and whether Outfront should be reimbursed for its
fees and expenses incurred in condemnation proceedings that the City dismissed.
In two related orders, the trial court granted the City's motion for summary
judgment on its dispossessory claim and denied Outfront's cross-motion for
summary judgment on that claim, granted the City's motion for summary judgment
on Outfront's counterclaim for just and adequate compensation, and denied
Outfront's motion for payment of fees and expenses under OCGA § 22-1-12.
Outfront now appeals these rulings by the trial court. For the reasons discussed
more fully below, we affirm the trial court's grant of summary judgment to the City
on its dispossessory claim and the denial of summary judgment to Outfront on that
claim, reverse the trial court's grant of summary judgment to the City on Outfront's
counterclaim for just and adequate compensation, and reverse the trial court's
denial of Outfront's motion for payment of fees and expenses.
A party is entitled to summary judgment if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. OCGA § 9-
11-56 (c). On appeal from the grant [or denial] of summary judgment, we
construe the evidence most favorably towards the nonmoving party, who is
given the benefit of all reasonable doubts and possible inferences. The party
opposing summary judgment is not required to produce evidence demanding
judgment for it, but is only required to present evidence that raises a genuine
issue of material fact. Our review of the grant or denial of a motion for summary
judgment is de novo.
(Citations and punctuation omitted.)Johnson v. Omondi , 294 Ga. 74 (https://case-
law.vlex.com/vid/johnson-v-omondi-no-890793884), 75-76, 751 S.E.2d 288
(https://case-law.vlex.com/vid/johnson-v-omondi-no-890793884) (2013).
847 S.E.2d 603
So viewed, the record reflects that WB Holdings-Triangle, LLC owned the property
located at 6215 Roswell Road in Sandy Springs, Georgia (the "Property"). Through
a lease agreement with WB, Outfront was permitted to own and operate certain
billboards on the
356 Ga.App. 406
Property in return for annual rent. The lease agreement described the leased
premises as including the area of the Property accommodating the base and
footings for the billboards and the air space above.
Effective November 1, 2014, WB and Outfront entered into an addendum to the
lease agreement that extended the term of the lease through October 2024 and
modified other terms (the "Amended Lease"). At issue in this litigation is Paragraph
15 of the Amended Lease, which stated:
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In the event all of the premises, or such part of the premises as to prevent the
continued maintenance of the Sign on the Premises, shall be taken for any
public or quasi-public purpose under any statute or by right of eminent domain
or private purchase in lieu thereof by a public or quasi-public body vested with
the power of eminent domain, then, when possession of the Premises (or such
part thereof) shall have been taken thereunder, as between Lessor and Lessee
this lease shall terminate and all rights of the Lessee hereunder to possession
of the Premises shall immediately cease and terminate. In such event, the
accrued Rent shall be paid up to the time of such termination (with a refund of
pre-paid Rent being made from Lessor to Lessee if appropriate) and the Lessee
shall have no claim against the Lessor for the value of the unexpired term
hereof and the Lessee shall not be entitled to receive any part of the
condemnation award or purchase price associated with the value of the real
property itself, provided, however, that Lessee retains and shall be entitled to
receive compensation for its remaining interests in the Premises related to its
trade fixtures, fixtures, personal property, intangibles and business from the
condemning authority directly. Lessee hereby assigns to Lessor the right to
receive compensation for any leasehold interest which tenant may have in the
Premises so condemned, it being understood and agreed that any valuation of
Lessee's interest in the Premises shall be based upon a fair market rent from
Lessee to Lessor.
The Condemnation Action. In September 2016, the City filed a condemnation
action in the Superior Court of Fulton County seeking to acquire land for the
implementation of the City's capital improvement plan, including the Property (the
"Condemnation Action"). The City's condemnation petition included WB and
Outfront as condemnees.
356 Ga.App. 407
In April 2017, the City reached a settlement with WB as to the amount it would pay
for the Property, and WB executed a quitclaim deed to the City. The City dismissed
WB from the Condemnation Action in May 2017.
The City and Outfront entered into negotiations but were unable to reach a
settlement regarding the removal of the billboards from the Property. After
settlement negotiations were unsuccessful, the City commenced a dispossessory
action against Outfront (as discussed infra), and, in June 2018, the City dismissed
the remaining condemnees from the Condemnation Action, including Outfront.
Outfront then filed a motion in the Condemnation Action seeking payment of its
fees and expenses under OCGA § 22-1-12 on the ground that the City had
abandoned the condemnation proceedings against it.
The Dispossessory Action. On April 12, 2018, the City's counsel sent a letter and
email to Outfront's counsel reciting that Outfront had rejected the City's prior
settlement offer, asserting that Outfront no longer had a leasehold interest in the
Property and was a holdover tenant under Paragraph 15 of the Amended Lease,
and proposing to forego any accrued rent if Outfront removed its billboards within
14 days (the "April 12 Letter"). The April 12 Letter further stated that if Outfront
"cannot accept this proposal, please consider this notice of intent to file the
dispossessory to oust the tenant holding over."
847 S.E.2d 604
Outfront refused to remove the billboards, and the City filed a dispossessory
action against Outfront in the Magistrate Court of Fulton County on April 27, 2018
(the "Dispossessory Action"). The City alleged that Outfront was a tenant holding
over with no remaining possessory interest in the Property as a result of the
quitclaim deed conveying the Property to the City and Paragraph 15 of the
Amended Lease, and it sought the removal of the billboards from the Property (the
1
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To continue reading
Request your trial
3 practice notes Search in 3 citing practice notes
Synovus Bank v. Kelley, S20Q0843 (https://case-law.vlex.com/vid/synovus-bank-
v-kelley-888647330)
United States Supreme Court of Georgia 24 Agosto 2020
...the judgment dates to determine priority among the competing same-term judgment
holders under § 9-12-87. As we noted: "To hold otherwise 847 S.E.2d 597 would
reinstitute the race to the courthouse by competing judgment creditors." Id. Therefore, we
do not read Morris-Weathers as holding tha......
Anita Holdings, LLC v. Outlet Mall of Savannah, LLC., A20A0980 (https://case-
l l /id/i h ldi ll 890700284)
"Dispossessory Action"). Outfront answered and filed a counterclaim alleging that
if the Amended Lease was terminated when the Property was sold to the City,
Outfront was entitled to just and adequate "compensation for its remaining
interests in the [Property] related to its trade fixtures, fixtures, personal property,
intangibles and business" in an amount of not less than $600,000.
In August 2018, the magistrate court transferred the Dispossessory Action,
including Outfront's counterclaim, to the Fulton County Superior Court, where the
case was assigned to the same superior court judge as the Condemnation Action.
After the transfer, the City filed a motion for summary judgment on both its
356 Ga.App. 408
dispossessory claim and Outfront's counterclaim for just and adequate
compensation, and Outfront filed a cross-motion for summary judgment on the
City's dispossessory claim.
The Superior Court's Two Orders. Following a hearing on the aforementioned
motions, the trial court entered an order in the Dispossessory Action granting the
City's motion for summary judgment on its dispossessory claim and denying
Outfront's cross-motion for summary judgment on that claim. That same day, the
trial court entered a second order granting the City's motion for summary
judgment on Outfront's counterclaim for just and adequate compensation in the
Dispossessory Action and denying Outfront's motion for attorney fees and
expenses in the Condemnation Action.
Case No. A20A1420
1. Outfront contends that the trial court erred in granting summary judgment to the
City on the City's dispossessory claim and in denying summary judgment to
Outfront on that claim. We disagree.
Under Georgia law, once a lease has been terminated and the tenant...
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law.vlex.com/vid/anita-holdings-llc-v-890700284)
United States United States Court of Appeals (Georgia)27 Octubre 2020
...requires a landlord to file an affidavit to support a dispossessory action. See, e.g.,
Outfront Media, LLC v. City of Sandy Springs , 356 Ga.App. 405, 408 (1), 847 S.E.2d 597,
604 (1) (2020). In this case, the record does not demonstrate any such affidavit outlining
Outlet Mall's contention......
Synovus Bank v. Kelley, S20Q0843 (https://case-law.vlex.com/vid/synovus-bank-
v-kelley-899572279)
United States Georgia Supreme Court 24 Agosto 2020
...judgment dates to determine priority among the competing same-term judgment
holders under OCGA § 9-12-87. As we noted: "To hold otherwise 847 S.E.2d 597 would
reinstitute the race to the courthouse by competing judgment creditors." Id. Therefore, we
do not read Morris-Weathers as holding th......
3 cases Search in 3 citing cases
Synovus Bank v. Kelley, S20Q0843 (https://case-law.vlex.com/vid/synovus-bank-
v-kelley-888647330)
United States Supreme Court of Georgia 24 Agosto 2020
...the judgment dates to determine priority among the competing same-term judgment
holders under § 9-12-87. As we noted: "To hold otherwise 847 S.E.2d 597 would
reinstitute the race to the courthouse by competing judgment creditors." Id. Therefore, we
do not read Morris-Weathers as holding tha......
Anita Holdings, LLC v. Outlet Mall of Savannah, LLC., A20A0980 (https://case-
law.vlex.com/vid/anita-holdings-llc-v-890700284)
United States United States Court of Appeals (Georgia)27 Octubre 2020
...requires a landlord to file an affidavit to support a dispossessory action. See, e.g.,
Outfront Media, LLC v. City of Sandy Springs , 356 Ga.App. 405, 408 (1), 847 S.E.2d 597,
604 (1) (2020). In this case, the record does not demonstrate any such affidavit outlining
Outlet Mall's contention......
Synovus Bank v. Kelley, S20Q0843 (https://case-law.vlex.com/vid/synovus-bank-
v-kelley-899572279)
United States Georgia Supreme Court 24 Agosto 2020
...judgment dates to determine priority among the competing same-term judgment
holders under OCGA § 9-12-87. As we noted: "To hold otherwise 847 S.E.2d 597 would
reinstitute the race to the courthouse by competing judgment creditors." Id. Therefore, we
do not read Morris-Weathers as holding th......
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3/10/23, 9:34 AM Billboard Complaints Reach Harbor District; Commissioners Consider, Reject, Asking Outfront Media to Remove It | Wild Rivers Outpost | Del Norte, Curry Counties
https://wildrivers.lostcoastoutpost.com/2020/aug/4/california-endowment-billboard-complaints-reach-ha/1/7
(/)
JESSICA CEJNAR / TUESDAY, AUG. 4, 2020 @ 4:55 P.M. / COMMUNITY, LOCAL GOVERNMENT
Billboard Complaints Reach Harbor District;
Com missioners Consider, Reject, Asking Outfront
Media to Remove It
Harbor commissioners considered, and rejected, taking action in response to complaints against
this California Endowment billboard. Photo: Jessica Cejnar
Previously:
• Protesters Speak Out Against Roger Gitlin Following 'Racist Bigoted'
Facebook Posts (../../../../../2020/jul/28/protesters-call-supervisors-speak-
out-against-roge/)
###
Complaints against a California Endowment (https://www.calendow.org/)
billboard, including a threat of vandalism, has reached the Crescent City
Harbor District Board of Commissioners.
Harbormaster Charlie Helms oated the idea of terminating the port’s
lease with Outfront Media, which owns the billboard that carries the
advertisement depicting people of color wearing masks to combat
COVID-19. One of those masks proclaims “Black Lives Matter.” Another
proclaims “End Racism.”
However, the Harbor District has no legal right to terminate the lease
with Outfront Media, which grants the company space for ve signs at
$16,068 annually, Helms said.
« DN High Seeks Input On Reopening Proposal;
Parents Set to Receive First-Day Packets By
Mail (/2020/aug/4/dn-high-seeks-input-
reopening-proposal-parents-set/)
OBITUARY: Virgil Valadao, 1957-2020 »
(/2020/aug/5/obituary-virgil-valadao-1957-
2020/)
3/10/23, 9:34 AM Billboard Complaints Reach Harbor District; Commissioners Consider, Reject, Asking Outfront Media to Remove It | Wild Rivers Outpost | Del Norte, Curry Counties
https://wildrivers.lostcoastoutpost.com/2020/aug/4/california-endowment-billboard-complaints-reach-ha/2/7
Commissioner Rick Shepherd suggested speaking with Outfront Media,
asking it to remove the California Endowment billboard. His colleagues
rejected this idea, saying that it could be seen as an infringement on the
Endowment’s right to freedom of speech and potentially open the harbor
district to a lawsuit.
“This body is supposed to be apolitical (and) that clearly is a political
sign,” said Commissioner Wes White. “We’re supposed to be an apolitical
organization and if we start messing with a sign that’s political in nature,
we’re no longer apolitical for those reasons.”
The Harbor District’s lease with Outfront Media began in June 2019 and
lasts for ve years. According to Helms’ staff report, beginning June 1,
2023, Outdoor Media will pay an annual rent of $17557.92 for space at the
port.
Helms’ staff report also included the First Amendment right granting
freedom of speech, which states “categories of speech that are given
lesser or no protection by the First Amendment (and therefore may be
restricted) include obscenity, fraud, child pornography, speech integral to
illegal conduct, speech that incites imminent lawless action, speech that
violates intellectual property law, true threats, and commercial speech
such as advertising.”
“To me, we’re getting paid $16,000 a year for dirt,” Helms said, noting
that the port doesn’t have any plans for the land the billboard sits on.
“We don’t have to do anything in the way of maintenance of the signs.
They don’t have anything up that is pornography or anything else. It’s
good earnings for the Harbor District with very little time invested.”
Helms noted a second California Endowment billboard sits on U.S. 101
near South Beach.
The two billboards have sparked several complaints, including one from
District 1 Supervisor Roger Gitlin. Gitlin voiced his displeasure on
Facebook on July 25
(https://www.facebook.com/roger.gitlin/posts/10158647443944516),
pointing out that the billboard was missing “any reference to European-
American inclusion.”
“The face declaring the ending of racism only underscores the racist
mindset of the California Endowment,” Gitlin wrote. “The inclusion of
the clinched st sends a terrible message to our community. Tragic!”
The California Endowment is a private health foundation created in 1996
when Blue Cross of California acquired WellPoint Health Networks. The
Endowment has more than $3 billion in assets and has funded the $1
billion Building Healthy Communities
(https://www.buildinghealthycommunities.org/) initiative, which has
invested in 14 California communities including Del Norte County.
Building Healthy Communities has been involved in candidate forums,
literacy symposiums and has supported organizations like First 5 Del
Norte and the Community Food Council.
On Tuesday, harbor commissioner Carol White said what stood out to her
about the restrictions on free speech listed in Helms’ report was the
“incites imminent lawless action component.”
“There have been people threatening to get out there and spray paint
(the billboard),” she said. “It didn’t just tick off one group of people.
There’s quite a few different organizations that are not happy about it
being up there.”
3/10/23, 9:34 AM Billboard Complaints Reach Harbor District; Commissioners Consider, Reject, Asking Outfront Media to Remove It | Wild Rivers Outpost | Del Norte, Curry Counties
https://wildrivers.lostcoastoutpost.com/2020/aug/4/california-endowment-billboard-complaints-reach-ha/3/7
Carol White said she has been directing her constituents to Outfront
Media and, when she found out who paid for the ad, to the California
Endowment.
Shepherd said the port’s rst course of action could be to ask Outfront
Media to remove the billboard, though he said he didn’t want to
terminate the harbor’s lease with the company.
Along with Wes White, commissioners Brian Stone and Jim Ramsey
favored taking no action with regard to the billboard.
Doing so could lead the harbor down a “slippery slope,” Stone said.
“We have been accused in the past by the public of doing things which
were not in the best interest of the harbor — basically mismanaging the
harbor,” he said. “For us to try to terminate this lease at this point in time
would, One, open ourselves up to the possibility of liability over freedom
of speech. And, two, breaking a lease without having a reason.”
Ramsey said he didn’t see the billboard as political. He pointed out that
the California Endowment paid money for the advertisement, and he
didn’t want to give up the revenue the port receives in lease payments
from Outfront Media.
Ramsey said no one has complained to him about the sign and if someone
has threatened to spray paint it, “hopefully the sheriff will catch them.”
“That’s also a situation of being intimidated by whatever group is upset
with this and that’s not the way this should be,” he said. “I’m not
personally happy with driving around this county and nding signs for a
certain candidate, or ags for a certain candidate blowing all over on the
ends of the street when it’s not supposed to be out until 45 days before
the election. But, you know, it’s not worth the hassle for me.”
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3/10/23, 8:39 AM State Supreme Court Denies Award of Outfront Attorney Fees Over Billboard Dispute | Billboard Insider™
https://billboardinsider.com/state-supreme-court-denies-award-of-outfront-attorney-fees-over-billboard-dispute/2/9
Views: 624
State Supreme Court Denies Award of
Outfront Attorney Fees Over Billboard
Dispute
June 2, 2020 12:04 am
The Indiana Supreme Court threw out an award of more than
$237,000 in attorney fees to Outfront Media, and other defendants
in a lawsuit over seven billboards outside Utica, Indiana. Justices
found the Clark Circuit Court lacked a basis for awarding fees to the parties who sued a regional development entity
that sought to restrict billboards along State Road 265 just north of Louisville.
The Indiana Lawyer reports that after Outfront received local zoning permission to put up seven billboards along the
roadway, River Ridge Development Authority sued to block the signs. While the litigation was pending, the Indiana
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3/10/23, 8:39 AM State Supreme Court Denies Award of Outfront Attorney Fees Over Billboard Dispute | Billboard Insider™
https://billboardinsider.com/state-supreme-court-denies-award-of-outfront-attorney-fees-over-billboard-dispute/3/9
Department of Transportation designated the road a scenic byway, which restricted billboards. River Ridge
voluntarily dismissed its suit after the scenic byway designation.
Outfront and the other defendants moved to recover attorney fees. The trial court granted them $237,440.63 in fees,
nding the award of fees warranted under a common-law obdurate behavior exception to the American Rule,
Indiana’s statutory General Recovery Rule and the court’s inherent authority to sanction parties.
The Indiana Court of Appeals, had previously reversed the award of fees and Outfront and the other original
defendants appealed to the State Supreme Court. The defendants argued that the original case had been “wildly
untimely,” and resulted in hundreds of thousands of dollars in unnecessary legal fees accrued by the defendants
when the RRDA voluntarily dismissed the suit nearly a year into the case.
The justices agreed with the appellate court in a unanimous ruling in River Ridge Development Authority v. Outfront
Media, LLC, David Watkins, No Moore, Inc., the Schlosser Family Limited Partnership, the Town of Utica, and the Utica
Board of Zoning Appeals, nding the trial court abused its discretion in its award of fees.
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3/10/23, 8:39 AM State Supreme Court Denies Award of Outfront Attorney Fees Over Billboard Dispute | Billboard Insider™
https://billboardinsider.com/state-supreme-court-denies-award-of-outfront-attorney-fees-over-billboard-dispute/4/9
2 Comments
Thomas Giesken
June 2, 2020 at 4:35 am
Hey John, so Outfront never got the permit that was originally legal once they led their application?? Sounds like
they got the shaft? Or am i reading this wrong and they got their permits?
John Weller
June 2, 2020 at 5:54 am
They originally did receive the local permits from Utica. Then both the city and Outfront were sued by the River Ridge
Development Authority. Then INDOT declared the road a scenic byway and River Ridge pulled their lawsuit as the
designation got them what they wanted. Seems like it would have been fair to grant the defendants their legal fees,
but we all know fair is not always the winning position.
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Court of Appeals Case No. 18A-PL-2347
COURT OF APPEALS OF INDIANA
River Ridge Dev. Auth.v.Outfront Media, LLC
129 N.E.3d 239 (Ind. App. 2019)
Decided Jul 15, 2019
Court of Appeals Case No. 18A-PL-2347
07-15-2019
RIVER RIDGE DEVELOPMENT AUTHORITY,
Appellant-Plaintiff, v. OUTFRONT MEDIA,
LLC, David Watkins, No Moore, Inc., the
Schlosser Family Limited Partnership, the Town
of Utica, and the Utica Board of Zoning Appeals,
Appellees-Defendants.
Tavitas, Judge.
Attorneys for Appellant: Anne K. Ricchiuto, Brian
J. Paul, Matthew C. Olsen, Indianapolis, Indiana,
David A. Lewis, Jeffersonville, Indiana Attorneys
for Appellees: Outfront Media, LLC and David
Watkins: Alan S. Townsend, Bradley M. Dick,
Indianapolis, Indiana Attorney for Appellees: No
Moore, Inc. and the Schlosser Family Limited
Partnership: Michael M. Maschmeyer,
Jeffersonville, Indiana
Attorneys for Appellant: Anne K. Ricchiuto, Brian
J. Paul, Matthew C. Olsen, Indianapolis, Indiana,
David A. Lewis, Jeffersonville, Indiana
Attorneys for Appellees: Outfront Media, LLC
and David Watkins: Alan S. Townsend, Bradley
M. Dick, Indianapolis, Indiana
Attorney for Appellees: No Moore, Inc. and the
Schlosser Family Limited Partnership: Michael M.
Maschmeyer, Jeffersonville, Indiana
Tavitas, Judge.
Case Summary
[1] River Ridge Development Authority ("River
Ridge") appeals the trial court's order granting
attorney fees to Outfront Media, LLC
("Outfront"), David Watkins, No Moore, Inc. ("No
Moore"), the Schlosser Family Limited
Partnership ("the Schlosser Family"), the Town of
Utica, and the Utica Board of Zoning Appeals
("Utica BZA") (collectively, "Appellees"). We
reverse.
Issue
[2] River Ridge raises numerous issues, which we
revise and restate as whether *242 the trial court's
award of attorney fees to Appellees is clearly
erroneous.
242
Facts
[3] River Ridge is "a military reuse authority and
governmental authority duly formed and existing
under Indiana Code sections 36-7-30-1, et seq."
Appellant's App. Vol. IV p. 14. River Ridge
"oversees construction and development of the
River Ridge Commerce Center," a business and
manufacturing park near the Ohio River and State
Road 265 in Clark County, Indiana. Id. at 15.
[4] Outfront is a company that conducts an
outdoor advertising business. In December 2015,
Outfront sought to construct seven billboards on
property owned by No Moore and the Schlosser
Family near the property owned by River Ridge.
At some point, the Utica Town Council President,
Steve Long, approved Outfront's permit
applications in an undated memo. On October 11,
2016, the Utica Town Council's attorney informed
the Council that they needed to "ratify" Long's
1
signature on the permits, which it did. Appellant's
App. Vol. IV p. 164. In March 2017, Watkins, an
employee of Outfront, filed outdoor advertising
sign permit applications with the Indiana
Department of Transportation ("INDOT"). In
April 2017, INDOT approved the applications for
the seven permits filed by Watkins.
[5] During the Fall of 2016 and again in the Fall of
2017, River Ridge contacted Outfront to discuss
the possibility of Outfront constructing signage at
the entrance to River Ridge's facility. Appellees
claim that River Ridge was interested in a
billboard, while River Ridge claims it was
interested in a "monument sign, some type of
signage strictly for River Ridge." Tr. Vol. II p. 84.
[6] In August 2017, the Kentuckiana Regional
Planning and Development Agency sent
information to INDOT to nominate a portion of
State Road 265 as a scenic byway. River Ridge,
along with several other groups and governmental
agencies, supported the nomination.
1
1 The Kentuckiana Regional Planning &
Development Agency is "an association of
local governments in a nine-county region
of southern Indiana and north central
Kentucky." http://www.kipda.org/ (last
visited June 27, 2019). It provides
"regional planning, review and technical
services in the areas of public
administration, social services and
transportation as well as community
ridesharing programs."
http://www.kipda.org/About_KIPDA.aspx
(last visited June 27, 2019).
[7] In September 2017, River Ridge filed a
petition with the Utica BZA and challenged the
validity of the permit issued by the Utica Town
Council for the construction of the seven
billboards ("BZA Petition"). River Ridge alleged
that the permits violated the Utica Zoning
Ordinance and that the Town Council President
lacked authority to issue the permits. At a
November 14, 2017 hearing before the Utica
BZA, the BZA refused to hear the petition because
the BZA was "not in the position to make or
review or modify any determination made by the
executive of this town." Appellant's App. Vol. V p.
97.
[8] Also in September 2017, River Ridge filed a
complaint with the Clark County Circuit Court
against Outfront, Watkins, No Moore, the
Schlosser Family, the Town of Utica, and INDOT
regarding the billboards. The complaint contained
four counts: (1) a claim for declaratory judgment
that neither the billboards nor the INDOT permits
were allowed; (2) a claim for public nuisance
caused by the billboards; (3) a claim for private
nuisance caused by the billboards; and (4) a
request for a permanent injunction. Appellees filed
multiple motions to dismiss, and River Ridge
subsequently raised an issue regarding *243 a
conflict of interest for the Town of Utica's counsel.
243
[9] Before the trial court ruled on the motions to
dismiss and after the Utica BZA refused to hear
the BZA Petition, River Ridge filed a motion to
amend its complaint to add certain claims and
dismiss other claims, which the trial court granted.
In its December 11, 2017 order, the trial court
stated:
2
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
(a) River Ridge's First Amended
Complaint and Verified Petition for
Judicial Review (the "Amended
Complaint"), attached to Plaintiff's Motion
as Exhibit 1, is hereby deemed filed as of
the date of this Order; (b) Plaintiff's prior
claims of public and private nuisance
(Counts II and III of Plaintiff's initial
Complaint) are hereby dismissed, with
each party to bear its own attorneys' fees
and costs related to such voluntarily
dismissed claims; (c) Defendants the
Indiana Department of Transportation
("INDOT") and Joe McGuinness, as
Commissioner of INDOT, are hereby
dismissed from this litigation without
prejudice, with each party to bear its own
attorneys' fees and costs; and (d) all
remaining Defendants shall respond to the
Amended Complaint within thirty (30)
days after conducting a mediation of this
matter, which mediation is currently being
scheduled by the parties.
Appellant's App. Vol. V pp. 98-99.
[10] The amended complaint included claims
against Outfront, Watkins, No Moore, the
Schlosser Family, the Town of Utica, and the
Utica BZA for: (1) declaratory judgment that the
billboards were not allowed; (2) a request for a
permanent injunction; (3) a verified petition for
judicial review of the BZA; and (4) a verified
action for mandate against the Utica BZA. The
Appellees then filed motions to dismiss the
amended complaint.
[11] On April 30, 2018, the Indiana Scenic Byway
Committee approved an application for S.R. 265
to become a scenic byway. A scenic byway
designation would apparently prevent additional
billboards from being constructed. On the same
day, River Ridge filed a notice of voluntary
dismissal of the amended complaint with prejudice
pursuant to Indiana Trial Rule 41(A)(1)(a).
[12] Outfront, Watkins, No Moore, the Schlosser
Family, and the Town of Utica then filed motions
for attorney fees. Outfront requested $149,918.01
in attorney fees; the Town of Utica requested
$51,824.52; and No Moore/the Schlosser Family
requested $35,698.10, for a total of $237,440.63 in
attorney fees. After additional briefing on the
matter, the trial court held a hearing at which
evidence was presented on the motion for attorney
fees. The parties then submitted proposed orders,
with the Appellees filing one joint proposed order.
The trial court then entered findings of fact and
conclusions of law granting Appellees' motions
for attorney fees and ordered River Ridge to pay
$237,440.63 in Appellees' attorney fees. River
Ridge now appeals.
2
2 River Ridge's attorney fees were more than
$400,000.00.
Analysis
[13] The trial court here entered findings of fact
and conclusions of law pursuant to Indiana Trial
Rule 52(A). In reviewing findings made pursuant
to Trial Rule 52, we first determine whether the
evidence supports the findings and then whether
findings support the judgment. K.I. ex rel. J.I. v.
J.H. , 903 N.E.2d 453, 457 (Ind. 2009). On appeal,
we "shall not set aside the findings or judgment
unless clearly erroneous, and due regard shall be
given to the opportunity of the trial court *244 to
judge the credibility of the witnesses." Id. ; Ind.
Trial Rule 52(A). A judgment is clearly erroneous
when there is no evidence supporting the findings
or the findings fail to support the judgment. K.I. ,
903 N.E.2d at 457. A judgment is also clearly
erroneous when the trial court applies the wrong
legal standard to properly found facts. Id.
244
[14] We note that the trial court adopted
Appellees' proposed findings of fact and
conclusions of law verbatim. "This practice
weakens our confidence as an appellate court that
the findings are the result of considered judgment
by the trial court." Cook v. Whitsell-Sherman , 796
N.E.2d 271, 274 n.1 (Ind. 2003). It is not
3
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
uncommon or per se improper for a trial court to
enter findings that are verbatim reproductions of
submissions by the prevailing party. Cty. of Lake v.
Pahl , 28 N.E.3d 1092, 1100 (Ind. Ct. App. 2015),
trans. denied . "Although we by no means
encourage the wholesale adoption of a party's
proposed findings and conclusions, the critical
inquiry is whether such findings, as adopted by the
court, are clearly erroneous." Id.
[15] We have significant concerns about some of
the trial court's findings. There was no weighing
of the evidence demonstrated in the findings.
Rather, many of the findings are merely
unsupported accusations, argumentative, and
inappropriate. Although the trial court has wide
discretion in weighing evidence and entering
findings, the completely one-sided nature of the
findings of fact and conclusions of law in this case
gives us pause.3
3 We recognize that the parties and attorneys
involved here appear to have significant
personal animosity. See, e.g. , Tr. Vol. II p.
111 (arguing that a letter from River
Ridge's attorney was "an attempt to harass
Utica. Probably an attempt to crush them
...."); Id. at 121 (arguing that the "bad faith
ranking" was "a 10"); Id. at 140 ("Now we
know from the time that we've spent here
today that the Defendants are really
irritated with River Ridge and they're even
emotional about having gone through this
process ...."); Id . at 169 ("We're filing
pleadings in what has to be the worst bad
faith in the last ten years by an appointed
group of people against elected officials.");
Id . at 173 ("I'm gonna forgive Mr.
Maschmeyer and unhear him to the extent
maybe he might have called me a liar in
open court.").
[16] For example, the trial court found:
The timing of RRDA's voluntary dismissal
confirms that the purpose of this lawsuit
was to buy time for the approval of the
scenic byway designation and cause
Outfront, No Moore/Schlosser, and the
Town to incur substantial expense in
defending and protecting their rights and
interests. The timing of the dismissal, with
prejudice, is more than coincidental. It is
disconcerting.
Appellant's App. Vol. II p. 28. This finding implies
that River Ridge knew the scenic byway
designation (which it did not request) would be
approved by the Indiana Scenic Byway
Commission before the litigation was concluded.
There is no evidence in the record, however, that
River Ridge had any way of knowing the
designation would be approved or when it would
be approved.
[17] The trial court also found: "The fact that
[River Ridge] dismissed its lawsuit with prejudice
the very same day the scenic byway commission
recommended approval of the byway designation,
despite the motions to dismiss being fully briefed,
demonstrates that [River Ridge] knew its lawsuit
was without merit." Id. It seems clear that River
Ridge dismissed its amended complaint on the
same day as the Scenic Byway Commission
recommended approval of the designation because
such a designation would prevent further
billboards *245 from being constructed along the
highway. Why would River Ridge continue
litigation to prevent the billboards from being
constructed when a scenic byway designation
would accomplish the same result? The trial
court's finding that the dismissal demonstrates that
River Ridge knew its lawsuit was without merit is
simply unsupported by any evidence.
245
[18] In another example, the trial court found:
4
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
It also is clear that [River Ridge] knew that
Watkins was acting solely as an employee
of Outfront. Watkins' email with [River
Ridge] identified him as an employee of
Outfront. (Outfront Hearing Ex. 1-3.)
[River Ridge] met with Watkins to discuss
advertising on Outfront's Billboards. This
Court finds that [River Ridge] naming
Watkins personally as Defendant, despite
knowing that he acted solely as an
employee of Outfront, was obdurate and
for the purpose of harassment.
Id. at 23. The finding fails to mention that the
INDOT permits were issued to Watkins (not
Outfront). We find that the trial court's findings of
fact are clearly erroneous.
[19] We now address the trial court's conclusions
of law. River Ridge challenges the trial court's
authority to order an award of attorney fees to
Appellees and, alternatively, the amount of
attorney fees awarded by the trial court. "[T]here
are two basic attorney fee schemes: the English
rule (‘loser pays’) and the American rule (‘every
man for himself ’)." State Bd. of Tax Comm'rs v.
Town of St. John , 751 N.E.2d 657, 658 (Ind.
2001). Advocates of the American Rule note:
4
4 "In determining a reasonable amount of
attorney's fees, consideration should be
given to the nature and difficulty of the
litigation; the time, skill, and effort
involved; the fee customarily charged for
similar legal services; the amount involved;
the time limitations imposed by the
circumstances; and the result achieved in
the litigation." R.L. Turner Corp. v.
Wressell , 44 N.E.3d 26, 39 (Ind. Ct. App.
2015). Because we conclude that the trial
court erred by awarding attorney fees here,
we do not reach the issue of whether the
amount of attorney fees awarded was
reasonable.
[S]ince litigation is at best uncertain one
should not be penalized for merely
defending or prosecuting a lawsuit, and [ ]
the poor might be unjustly discouraged
from instituting actions to vindicate their
rights if the penalty for losing included the
fees of their opponents' counsel. Also, the
time, expense, and difficulties of proof
inherent in litigating the question of what
constitutes reasonable attorney's fees
would pose substantial burdens for judicial
administration.
Town of St. John , 751 N.E.2d at 658 (quoting
Fleischmann Distilling Corp. v. Maier Brewing
Co. , 386 U.S. 714, 718, 87 S. Ct. 1404, 18
L.Ed.2d 475 (1967) ). Indiana has consistently
followed the American Rule. Loparex, LLC v. MPI
Release Techs., LLC , 964 N.E.2d 806, 816 (Ind.
2012). "Thus, in the absence of statutory authority
or an agreement between the parties to the
contrary—or an equitable exception —a
prevailing party has no right to recover attorney
fees from the opposition." Id. (footnote omitted)
(emphasis added).
[20] The most common equitable exceptions to the
American Rule are:
1) The "obdurate behavior" exception, in
which courts impose costs upon
defendants as a punishment for bringing
frivolous actions or otherwise acting in bad
faith.
2) The "common fund" exception, in
which an award benefits members of an
ascertainable class, and the court
reimburses the prevailing litigant's attorney
*246246
5
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
fees out of that pool of money to prevent
the unjust enrichment of free riders.
3) The "private attorney general"
exception, where courts award fees to
litigants who bring actions to protect
important social policies or rights.
Town of St. John , 751 N.E.2d at 658-59 (internal
citations omitted). Indiana, however, has rejected
the private attorney general exception, and the
common fund exception is inapplicable here. Id. at
664.
[21] The trial court concluded it had authority to
award attorney fees to Appellees as follows:
2. RRDA also contends that this Court
does not have authority to assess costs and
attorneys' fees. This Court disagrees and
concludes that it has three (3) independent
bases for assessing costs and attorneys'
fees against RRDA, and each supports
sanctioning RRDA.
3. First, this Court has statutory authority
to award costs and attorneys' fees. See Ind.
Code § 34-52-1-1 ; D.S.I. v. Natare Corp .,
742 N.E.2d 15, 24 (Ind. Ct. App. 2000)
(concluding that party was prevailing party
when "the litigation culminated
successfully for Natare in a judicial order
that altered the litigants' legal relationship
in a way favorable to Natare"); Ilagan v.
McAbee , 634 N.E.2d 827, 829 (Ind. Ct.
App. 1994) ("A dismissal with prejudice is
a dismissal on the merits. A dismissal with
prejudice is conclusive of the rights of the
parties and is res judicata as to any
questions which might have been
litigated.") (internal citation omitted).
4. Second, this Court has inherent
authority to fashion an equitable remedy
that is complete and fair to all parties,
especially those parties forced to
unnecessarily incur substantial expense to
protect their rights and interests in
response to meritless litigation. The
Indiana Supreme Court has long held that
Indiana courts have the equitable power
"to prevent vexatious litigation,
multiplicities of suits, or circuit of actions.
Equity will not suffer a wrong without a
remedy." King v. City of Bloomington ,
[239 Ind. 548,] 159 N.E.2d 563, 571
([Ind.]1959). "A court's power to award
attorneys' fees to a party has long been
established." In re Estate of Kroslack , 570
N.E.2d 117, 120 (Ind. Ct. App. 1991).
* * * * *
6
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
6. Third, this Court has authority to award
fees under the common-law obdurate
behavior exception: "[t]he obdurate
behavior exception only comes into play at
the time a party files a knowingly baseless
claim or at the time a party discovers that
the claim is baseless and fails to dismiss it.
Such conduct will constitute obdurate
behavior if the trial court determines that it
was vexatious and oppressive in the
extreme and a blatant abuse of the judicial
process." Kikkert v. Krumm , 474 N.E.2d
503, 505 (Ind. 1985).
7. This Court also concludes that the
frivolous lawsuit statute, Ind. Code § 34-
52-1-1, did not abrogate the common-law
obdurate behavior exception because the
Indiana Supreme Court continued to
recognize its validity long after enactment
of the frivolous lawsuit statute. Mitchell v.
Mitchell , 695 N.E.2d 920, 924 (Ind.
1998). As a result, this Court concludes
that the common-law obdurate behavior
exception is of continuing validity.
Demming v. Underwood , 943 N.E.2d 878,
888 (Ind. Ct. App. 2011) (concluding that
"in cases of doubt, we construe [a] statute
as not changing the common law").
Appellant's App. Vol. II pp. 13-14. River Ridge
appeals the trial court's grant of attorney fees
under these three grounds. We will address each
separately.*247 A. Recovery under Indiana Code
Section 34-52-1-1
247
[22] The trial court first awarded attorney fees
pursuant to a statutory exception to the American
Rule. Indiana Code Section 34-52-1-1(b)
provides:
In any civil action, the court may award
attorney's fees as part of the cost to the
prevailing party , if the court finds that
either party:
(1) brought the action or defense on a
claim or defense that is frivolous,
unreasonable, or groundless;
(2) continued to litigate the action or
defense after the party's claim or defense
clearly became frivolous, unreasonable, or
groundless; or
(3) litigated the action in bad faith.
(emphasis added).
[23] "This court has repeatedly stated that
‘prevailing party’ in the context of attorney fees
denotes a party who successfully prosecutes his
claim or asserts his defense." Delgado v. Boyles ,
922 N.E.2d 1267, 1270 (Ind. Ct. App. 2010),
trans. denied . Citing D.S.I. v. Natare Corp. , 742
N.E.2d 15, 24 (Ind. Ct. App. 2000), trans. denied ,
and Ilagan v. McAbee , 634 N.E.2d 827, 829 (Ind.
Ct. App. 1994), the trial court concluded that it
had statutory authority to award attorney fees
under Indiana Code Section 34-52-1-1(b). In
D.S.I. , the parties reached a settlement agreement
whereby the plaintiff/counterclaim defendant
agreed to withdraw its lawsuit against the
defendant/counterclaim plaintiff and agreed to a
permanent injunction. We concluded that "the
litigation culminated successfully for Natare in a
judicial order that altered the litigants' legal
relationship in a way favorable to Natare." D.S.I. ,
742 N.E.2d at 25. In Ilagan , we noted that "[a]
dismissal with prejudice is conclusive of the rights
of the parties and is res judicata as to any
questions which might have been litigated." Ilagan
, 634 N.E.2d at 829.
[24] Following D.S.I. and Ilagan , our Supreme
Court, however, addressed the definition of
"prevailing party" in Reuille v. E.E.
7
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
Brandenberger Const., Inc. , 888 N.E.2d 770, 771
(Ind. 2008). There, the parties entered into an
agreement for the construction of a home, and
their contract included a provision for attorneys
fees to a "prevailing party." Reuille , 888 N.E.2d at
771. Reuille filed a complaint against
Brandenberger, alleging breach of contract, breach
of warranty, and negligence. Following mediation,
"the parties reached a settlement on all issues with
the exception of fees, which was explicitly
reserved for judicial resolution." Id. The trial court
then denied Reuille's request for attorney fees.
[25] On appeal, our Supreme Court agreed and
held that the term "prevailing party" appeared "to
contemplate a trial on the merits and entry of a
favorable judgment in order to obtain prevailing
party status." Id. at 771-72. The Court noted that
several other Indiana decisions "corroborate this
approach." Id. at 772 (citing Heritage House of
Salem, Inc. v. Bailey , 652 N.E.2d 69, 79-80 (Ind.
Ct. App. 1995) (plaintiff is not a prevailing party
where it obtained a preliminary injunction but
where judgment ultimately was rendered for the
defendant), trans. denied ; State Wide Aluminum,
Inc. v. Postle Distribs., Inc. , 626 N.E.2d 511, 516-
17 (Ind. Ct. App. 1993) (State Wide is not a
prevailing party under § 34-1-32-1(b) (now § 34-
52-1-1 ) because it did not receive a judgment),
trans. denied ; State ex rel. Prosser v. Ind. Waste
Sys., Inc. , 603 N.E.2d 181, 189 (Ind. Ct. App.
1992) (a favorable ruling on a motion is not a
judgment allowing the recovery of costs as a
prevailing party)). The Court observed that an
approach where the term "prevailing party" is
"treated with ambiguity or discretion" would
provoke "litigation *248 about who won the
litigation, in addition to litigation over the
appropriate amount of fees." Id.
248
[26] Without mentioning or addressing Reuille ,
Appellees make a convoluted argument that they
were prevailing parties, and we find that their
argument is not cogent. See Ind. Appellate Rule
46(A)(8)(a). Given our Supreme Court's holding
in Reuille , we conclude that none of the Appellees
were prevailing parties because the complaint was
dismissed with prejudice on the motion of River
Ridge. As River Ridge argues: (1) the dismissal
did not resolve any issues of law or fact; (2) the
dismissal occurred before any hearing on a
dispositive motion, before meaningful discovery,
and before any hearing on the merits; and (3) no
judicial order was required to effectuate the
dismissal under Indiana Trial Rule 41(A)(1)(a).
River Ridge properly points out, "[t]here can be
lots of reasons to voluntarily dismiss a lawsuit,
oftentimes having nothing to do with the suit's
validity, yet those reasons nearly never warrant a
fees award." Appellant's Reply Br. p. 22. Under
these circumstances, none of the Appellees were
prevailing parties, and accordingly, Indiana Code
Section 34-52-1-1(b) is inapplicable. The trial
court's finding on this issue is clearly erroneous.
5
5 Appellees rely in part on Indiana State Bd.
of Pub. Welfare v. Tioga Pines Living Ctr.,
Inc. , 622 N.E.2d 935, 946 (Ind. 1993),
cert. denied , 510 U.S. 1195, 114 S. Ct.
1302, 127 L.Ed.2d 654 (1994), which
preceded Reuille and held "plaintiffs may
be considered prevailing parties without
obtaining a favorable final judgment
following a full trial on the merits.
Plaintiffs may prevail, for example, by
consent decree or settlement which grants
them the relief sought in bringing suit."
Reuille distinguished Tioga Pines , noting
that Tioga Pines involved "federal statutory
provisions." Reuille , 888 N.E.2d at 772
n.2. Regardless, however, there was no
consent decree or settlement that granted
Appellees relief here, and thus, Tioga Pines
is inapplicable.
B. Obdurate Behavior Exception
[27] River Ridge also argues that the trial court
erred by awarding attorney fees to Appellees
under the obdurate behavior equitable exception.
The "obdurate behavior" exception to the
American Rule applies when "courts impose costs
upon defendants as a punishment for bringing
8
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
frivolous actions or otherwise acting in bad faith."
Town of St. John , 751 N.E.2d at 658 (internal
citations omitted).
[28] River Ridge argues that the obdurate behavior
exception no longer exists because it has been
codified in Indiana Code Section 34-52-1-1(b).
We agree. Indiana Code Section 34-52-1-1 was
enacted in 1998. The prior version of the statute,
Indiana Code Section 34-1-32-1, added the
language at issue here in 1986. In 2001, in Town of
St. John , our Supreme Court noted:
In Kikkert v. Krumm , 474 N.E.2d 503, 505
(Ind. 1985), we discussed the obdurate
behavior exception to the American rule,
but found it inapplicable under the facts
presented. The following year, the Indiana
legislature codified this exception in what
is now Ind. Code Ann. § 34-52-1-1 (West
2001). The "General Recovery Rule"
allows prevailing parties to recover
attorney fees if the court finds the other
party brought or pursued a frivolous,
unreasonable or groundless claim or
defense, or acted in bad faith. Id. at § 34-
52-1-1(b).
Town of St. John , 751 N.E.2d at 659 (emphasis
added). More recently, in 2012, in Loparex , our
Supreme Court again noted that the "obdurate
behavior" exception is now codified at Indiana
Code Section 34-52-1-1. Loparex , 964 N.E.2d at
816 n.5.*249 [29] Our Supreme Court addressed a
similar circumstance in Kosarko v. Padula , 979
N.E.2d 144, 145 (Ind. 2012), where the Court held
that the "Tort Prejudgment Interest Statute
["TPIS"] abrogates and supplants the common law
prejudgment interest rules in cases covered by the
statute." The Court noted:
249
The plain language of the TPIS makes no
reference to the common law rules
governing prejudgment interest, including
the common law requirement that
prejudgment interest can be awarded only
where the damages are complete and
ascertainable. But the comprehensive
nature of the TPIS and the codification of
two common law rules convince us that
the legislature intended the statute to be
the exclusive source governing the award
of prejudgment interest in cases falling
within its ambit. Not only does the statute
establish preconditions for an award of
prejudgment interest, Ind. Code §§ 34-51-
4-5, -6, it also affirmatively authorizes the
court to award prejudgment interest as part
of a judgment, id . § 35-51-4-7, specifies
the types of actions to which the statute
applies and does not apply, id . §§ 34-51-4-
1 to -4, and limits the time period and rate
of any prejudgment interest awarded under
the statute, id . §§ 34-51-4-8, - 9. The
statute spans the entire subject of
prejudgment interest and is capable of
being implemented without reference to
the common law. Further, both Indiana
Code Section 35-51-4-7 (authorizing the
court to award prejudgment interest as part
of a judgment) and Section 34-51-4-3
(exempting punitive damages from
prejudgment interest) codify rules that
already existed at common law for more
than one hundred years. See [ New York, C.
& St. L. Ry. Co. v. Roper ], 176 Ind. [497,]
509-510, 96 N.E. [468,] 473 [ (1911) ].
Were the TPIS merely supplemental in
nature, as the defendant and amicus curiae
DTCI contend, then these provisions
would be unnecessary since any matters
not addressed by the statute would be
subject to the common law rules. In light
of the wide-ranging treatment of the
subject matter, considered in conjunction
with the fact that the TPIS expressly
9
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
adopts only selected portions of the
common law, we conclude that the TPIS
unmistakably implies the legislature's
intent to substitute the statute for the
common law with respect to cases falling
within the scope of the TPIS.
Kosarko , 979 N.E.2d at 149-50.
[30] Given our Supreme Court's statements in
Town of St. John and Loparex , we cannot say that
the obdurate behavior exception to the American
Rule survived the codification of Indiana Code
Section 34-52-1-1 and its predecessor. See, e.g.,
Kosarko , 979 N.E.2d at 149-50. We note, as our
Supreme Court did in Kosarko , that "[t]o hold
otherwise would be to render the statute and its
requirements virtually meaningless—a party who
failed to fulfill the statute's requirements could
merely turn to the common law for relief." Id. at
149. Accordingly, the trial court's use of the
obdurate behavior exception to award attorney
fees to Appellees is clearly erroneous.
C. Inherent Authority
[31] In general, "[i]n the absence of statutory
authority or an agreement between the parties to
the contrary—or an equitable exception—a
prevailing party has no right to recover attorney
fees from the opposition." C.H. v. A.R. , 72 N.E.3d
996, 1003 (Ind. Ct. App. 2017). Appellees,
however, argue that the trial court had the inherent
authority to award them attorney fees as a result of
River Ridge's alleged abuses.*250 [32] Our courts
have recognized that a trial court has inherent
authority to award attorney fees to a party under
certain circumstances. For example, our courts
have repeatedly recognized that a trial court has
inherent authority to award attorney fees to ensure
compliance with court orders. See, e.g., In re
Paternity of Pickett , 44 N.E.3d 756, 770 (Ind. Ct.
App. 2015) ("The trial court has inherent authority
to award attorney fees for civil contempt.... No
statutory sanction is needed as a court's power to
enforce compliance with its orders and decrees
duly entered is inherent.") (internal citations
omitted); Kahn v. Baker , 36 N.E.3d 1103, 1116
(Ind. Ct. App. 2015) (affirming the award of
attorney fees for contempt because, "apart from
any statutory authority, a court has the inherent
authority to enforce its orders and to compensate
the aggrieved party for losses and damages
resulting from another's contemptuous actions"),
trans. denied ; Allied Prop. & Cas. Ins. Co. v.
Good , 919 N.E.2d 144, 154 (Ind. Ct. App. 2009)
(recognizing a trial court's inherent ability to
"sanction parties and attorneys for violating orders
in limine and causing mistrials ... to protect the
integrity of the judicial system and to secure
compliance with the court's rules and orders"),
trans. denied .
250
[33] In fact, our Supreme Court has held in Noble
Cty. v. Rogers , 745 N.E.2d 194 (Ind. 2001), that:
10
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
To deny a court the power to enforce
obedience to its lawful orders against
parties who have been subjected properly
to its jurisdiction in the first instance, is to
nullify its effectiveness as an independent
branch of our government. The power of a
court to enforce compliance with its orders
and decrees duly entered is inherent. No
statutory sanction is needed. In both equity
and law a court would be powerless to give
effective relief were its arms tied by such
requirements as relator asserts are
necessary.
State ex rel. Brubaker v. Pritchard , 236
Ind. 222, 226-27, 138 N.E.2d 233, 235
(1956). See also O'Conner v. State , 178
Ind. App. 415, 382 N.E.2d 994, 998 (1978)
("In protecting this discovery process, the
trial court has the inherent power to
impose sanctions...."), aff'd , 272 Ind. 460,
399 N.E.2d 364 (1980). To protect the
proper functioning of judicial proceedings,
we also have imbedded this power in
numerous court rules. See, e.g., Ind. Trial
Rule 11, Ind. Trial Rule 37, Zwiebel v.
Zwiebel , 689 N.E.2d 746, 750 (Ind. Ct.
App. 1997) ("[Under Trial Rule 11 ], the
trial court has the discretion to impose
sanctions where it determines that the
verified motion contains information that
the attorney knows to be false."), transfer
denied . Similarly, the judicial power
encompasses the ability to hold a litigant
in contempt. See, e.g., Meyer v. Wolvos ,
707 N.E.2d 1029, 1031 (Ind. Ct. App.
1999) ("We have recognized the inherent
judicial power to deal with contempt. No
statutory sanction is needed as a court's
power to enforce compliance with its
orders and decrees duly entered is
inherent."), transfer denied ; Crowl v.
Berryhill , 678 N.E.2d 828, 831 (Ind. Ct.
App. 1997) ("Time and time again, Indiana
appellate courts have recognized the
inherent judicial power to deal with
contempt.").
Noble Cty. , 745 N.E.2d at 198-99.
[34] Here, we are not dealing with a party in
contempt, violations of the discovery process, or
violations of other court orders. Rather, the trial
court here awarded attorney fees to Appellees
based on a "pattern of obdurate behavior." See
Appellant's App. Vol. II pp. 29, 31, 36 ("This
Court concludes that [River Ridge's] conduct was
in bad faith, obdurate, harassing *251 ....");
("litigation was in bad faith, harassing, obdurate,
and the lawsuit was groundless") ("baseless
litigation") ("advanced meritless claims");
("negative tactics"). These complaints are grounds
for an award of attorney fees under Indiana Code
Section 34-52-1-1(b), which we have found
inapplicable here. An award of attorney fees
under these circumstances would merely
circumvent Indiana Code Section 34-52-1-1(b),
which we cannot allow. For these reasons, we find
that the trial court's findings of fact and
conclusions of law are clearly erroneous.
251
6
6 Appellees rely, in part, upon Matter of
Estate of Kroslack , 570 N.E.2d 117, 121
(Ind. Ct. App. 1991). There, Indiana Code
Section 34-52-1-1(b) (then Indiana Code
Section 34-1-32-1 ) was inapplicable
because the attorney fees were incurred
prior to the effective date of the relevant
statutory provisions. Moreover, the
obdurate behavior exception was
inapplicable because it only applied to
"situations in which the defendant has been
forced to defend a baseless claim."
Kroslack , 570 N.E.2d at 120. This court,
however, affirmed the award of attorney
fees based on the party's bad faith and
conduct, which was "vexatious and
oppressive in the extreme." Id. at 121.
Here, Indiana Code Section 34-52-1-1(b)
was in effect, and an award of attorney fees
would circumvent the express language of
11
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
the statute. Moreover, we do not find that
River Ridge acted in bad faith.
--------
Conclusion
[35] The trial court improperly ordered River
Ridge to pay Appellees' attorney fees. We reverse.
[36] Reversed.
Crone, J., and Bradford, J., concur.
12
River Ridge Dev. Auth. v. Outfront Media, LLC 129 N.E.3d 239 (Ind. App. 2019)
This opinion is subject to revision before final
publication in the Pacific Reporter
2017 UT 74
IN THE
SUPREME COURT OF THE STATE OF UTAH
OUTFRONT MEDIA, LLC,
Appellant,
v.
SALT LAKE CITY CORPORATION, CORNER PROPERTY, L.C.,
and UTAH OUTDOOR ADVERTISING, INC.,
Appellees.
No. 20160150
Filed October 23, 2017
On Direct Appeal
Third District, Salt Lake
The Honorable Todd M. Shaughnessy
No. 160900413
Attorneys:
Leslie Van Frank, Bradley M. Strassberg, Salt Lake City, for appellant
Samantha J. Slark, Katherine N. Lewis, Salt Lake City, for appellee
Salt Lake City Corporation
Jon H. Rogers, Salt Lake City, for appellees Corner Property, L.C.
and Utah Outdoor Advertising, Inc.
CHIEF JUSTICE DURRANT authored the opinion of the Court, in which
ASSOCIATE CHIEF JUSTICE LEE, JUSTICE DURHAM, JUSTICE HIMONAS, and
JUSTICE PEARCE joined.
CHIEF JUSTICE DURRANT, opinion of the Court:
Introduction
¶ 1 In this case, we review Salt Lake City‘s decisions regarding
two billboard owners‘ requests to relocate their billboards. Outfront
Media, LLC, formerly CBS Outdoor, LLC, (CBS) came out the worse
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
2
in the City‘s decision-making process. The City denied CBS‘s request
to relocate its billboard to an adjacent lot along Interstate 15 (I -15).
The same day, the City granted Corner Property, L.C.‘s request to
relocate its billboard to the lot CBS was vacating.
¶ 2 Dissatisfied with the City‘s decisions, CBS appealed to a
land use hearing officer, who upheld both decisions. CBS then
sought judicial review in district court under the Municipal Land
Use, Development, and Management Act, Utah Code section 10-9a-
801. The district court also upheld the City‘s decisions. CBS now
appeals to this court, contending that the City‘s denial of its
relocation request and grant of Corner Property‘s were arbitrary,
capricious, and illegal.
¶ 3 CBS‘s primary argument on appeal is that the City‘s
decision to deny CBS‘s requested relocation was ―illegal‖ because
the City invoked the power of eminent domain to effect a physical
taking of CBS‘s billboard without complying with the procedural
requirements that constrain the use of eminent domain. In particular,
CBS asserts that the City was required to comply with Utah Code
section 78B-6-504(2)(b), which provides that ―[p]roperty may not be
taken by a political subdivision of the state unless the governing
body of the political subdivision approves the taking.‖ For a city, the
―governing body‖ is the city‘s ―legislative body.‖ For Salt Lake City,
that legislative body is the city council. It is undisputed that the
City‘s mayor made the decision denying CBS‘s request to relocate its
billboard without the approval of the Salt Lake City Council.
¶ 4 At the heart of this case is the proper interpretation of Utah
Code section 10-9a-513 (Billboard Compensation Statute), which
provides that a municipality is ―considered to have initiated the
acquisition of a billboard structure by eminent domain‖ when it
denies billboard relocation requests that, like CBS‘s, meet certain
spacing requirements. In CBS‘s view, under this statute the denial of
its relocation request constituted a physical taking of its billboard,
which required compliance with the eminent domain procedures.
We disagree. The Billboard Compensation Statute does not provide
that a municipality has taken a billboard structure when it denies a
relocation request. Instead, under that section, a municipality is only
considered to have done so for purposes of compensation. We
therefore view the Billboard Compensation Statute as creating a
standalone compensation scheme that does not incorporate,
expressly or impliedly, the procedural requirements that
circumscribe the eminent domain power. Accordingly, the mayor of
Salt Lake City was not required to seek the approval of the Salt Lake
City Council before denying CBS‘s request to relocate its billboard.
Cite as: 2017 UT 74
Opinion of the Court
3
¶ 5 We also reject CBS‘s additional arguments that the Mayor‘s
decision violated the City‘s billboard ordinance and that the Mayor‘s
decision was arbitrary and capricious. We therefore affirm the
district court.
Background
¶ 6 CBS owned a billboard at 726 West South Temple, adjacent
to I-15. CBS leased the land at that location from Corner Property.
Corner Property also owned land and had a billboard at 280 West
500 South. In the fall of 2014, CBS‘s lease from Corner Property was
about to expire, so CBS sought a means for relocating its billboard.
CBS submitted a request—not the one currently before us—to the
City to relocate its billboard to an adjacent lot at 738 West South
Temple, and to increase its billboard‘s height. The City denied this
request, and this denial was affirmed upon district court review.1
CBS then voluntarily demolished its billboard to avoid trespassing
on Corner Property‘s land.
¶ 7 In its letter denying CBS‘s first request, the City told CBS it
could ―modify its application to either bank its billboard credits [for
the now demolished sign] . . . or request to relocate the sign under
Utah Code 10-9a-511(3)(c)(i).‖ The City reserved the right, however,
to condemn the sign under Utah Code section 10-9a-513(2). CBS
accepted this invitation to modify its relocation request ten months
later.2 Its modified relocation request conformed to the requirements
_____________________________________________________________
1 CBS made its initial relocation request under Utah Code section
72-7-510.5, which allows the owner of a sign to take certain actions if
a UDOT improvement obstructs the view of the sign. Under this
statute ―the owner of the sign may: (a) adjust the height of the sign;
or (b) relocate the sign to a point within 500 feet of its prior location,
if‖ certain other requirements are met. Because CBS‘s request sought
to both ―relocate the sign‖ and ―adjust the height of the sign,‖ the
City denied the request. CBS sought an administrative appeal, which
the City denied. It then sought district court review, and the district
court affirmed the City‘s conclusion that section 72-7-510.5 allows
only relocation or height increase, but not both. CBS did not appeal
from that decision.
2 The City and Corner Property note that CBS tore down its
billboard before modifying its request to relocate to conform to the
requirements of Utah Code section 10-9a-511(3)(c)(i) (the Billboard
Relocation Statute). In Corner Property‘s view, this means that CBS
(Continued)
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
4
of Utah Code section 10-9a-511(3)(c)(i) (the Billboard Relocation
Statute). That statute provides that a municipality may, despite a
prohibition in its zoning ordinance, agree to a mutually acceptable
relocation of a billboard. But if the City denies a billboard owner‘s
request to relocate, and the request meets certain spacing
requirements, the City ―is considered to have initiated the
acquisition of [the] billboard structure by eminent domain.‖3 CBS‘s
requested relocation, from the 726 lot to the 738 lot, was within the
spacing requirements.
¶ 8 Shortly after CBS first applied to relocate its billboard,
Corner Property also requested to relocate a billboard under the
Billboard Relocation Statute. Corner Property asked the City to
permit it to relocate its billboard from 280 West 500 South to 726
West South Temple. This move failed to satisfy the spacing
requirements in the Billboard Compensation Statute, so the City
would have been free to deny it without paying just compensation.
The City could not grant both CBS‘s and Corner Property‘s requests
to relocate, because state law prohibits freeway-oriented billboards
from being located within 500 feet of each other,4 and the two South
Temple lots are within that spacing restriction. Both relocations were
also technically prohibited under the City‘s zoning ordinance
pertaining to billboards, Salt Lake City Code section 21A.46.160(N).
That ordinance prohibits the construction of new billboards in a
―gateway‖ area, which includes I-15 and the area of 500 South where
Corner Property‘s billboard was previously located.5
did not have a billboard to relocate, but instead was the owner of
only billboard credits. But this overlooks the fact that the City
invited CBS to ―modify‖ its application to relocate, including the
specific option of modifying the request to conform to the Billboard
Relocation Statute. The City has thus treated CBS‘s request to
relocate as if it was filed while the billboard was still in existence,
and the City has not argued that we should treat it any other way. In
any event, because we conclude below that the City validly denied
CBS‘s relocation request, we need not decide whether CBS was
technically entitled to file such a request after taking down its
billboard.
3 UTAH CODE § 10-9a-513(2)(a)(iv).
4 See id. § 72-7-505(3).
5 See SALT LAKE CITY CODE § 21A.46.160(B) (defining ―gateway‖).
Cite as: 2017 UT 74
Opinion of the Court
5
¶ 9 The City, acting through its then-mayor, Ralph Becker, and
without seeking the approval of the city council, denied CBS‘s
request to relocate its billboard and approved Corner Property‘s. The
City stated that its reason for denying CBS‘s request was that the
requested location fell within a gateway under the City‘s zoning
ordinances, and the ordinance prohibits construction of a billboard
in a gateway area. The City acknowledged that it had authority
under the Billboard Relocation Statute to waive this zoning
ordinance, but it informed CBS that it was unwilling to do so
because it ―has a longstanding policy in favor of retiring and
removing billboards as the opportunity to do so arises.‖
¶ 10 The City granted Corner Property‘s request to relocate on
the same day it denied CBS‘s. Though, like CBS‘s request, Corner
Property‘s requested relocation would have been in violation of the
―gateway‖ zoning ordinance, the City waived this ordinance for
Corner Property. Mayor Becker submitted a declaration stating that
he decided to deny CBS‘s request, and grant Corner Property‘s, in
order to achieve a net reduction in the number of billboards located
in ―gateway‖ areas by one. His decisions resulted in the permanent
removal of Corner Property‘s 500 South billboard.
¶ 11 CBS sought review of these decisions before the City‘s
appeal authority, a land use hearing officer.6 The hearing officer
_____________________________________________________________
6 ―[A]ny person adversely affected by the land use authority‘s
decision administering or interpreting a land use ordinance may,
within the time period provided by ordinance, appeal that decision
to the appeal authority by alleging that there is error in any order,
requirement, decision, or determination made by the land use
authority in the administration or interpretation of the land use
ordinance.‖ UTAH CODE § 10-9a-703(1).
Before the hearing officer, the parties disputed the scope of
review by the hearing officer and, in particular, whether the hearing
officer could decide issues of state law. The City argued that the
hearing officer had authority to determine only the correctness of
city decisions insofar as they turned on the interpretation of a city
ordinance. The City relied on Utah Code section 10-9a-707 (2016),
which provides that ―[t]he appeal authority shall determine the
correctness of a decision of the land use authority in its
interpretation and application of a land use ordinance‖ and that
―[o]nly those decisions in which a land use authority has applied a
land use ordinance to a particular application, person, or parcel may
(Continued)
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
6
ultimately upheld the City‘s decisions to deny CBS‘s request and
approve Corner Property‘s. CBS then sought judicial review in
district court.7 The district court rejected CBS‘s arguments and
concluded that the City‘s decisions were not arbitrary, capricious, or
illegal, and affirmed the decision. CBS now appeals, pressing the
same arguments it made below. We have jurisdiction under Utah
Code section 78A-3-102(3)(j).
Standard of Review
¶ 12 This is an appeal from a district court‘s review of an
administrative appeal challenging a municipal land use decision.8
be appealed to an appeal authority.‖ The hearing officer disagreed
and concluded that he had authority to review the City‘s decisions in
their entirety, including the aspects of state law that were implicated
by the City‘s decisions.
7 ―Any person adversely affected by a final decision made in the
exercise of or in violation of the provisions of this chapter may file a
petition for review of the decision with the district court within 30
days after the decision is final.‖ UTAH CODE § 10-9a-801(2)(a).
The district court determined that the hearing officer‘s authority
was limited to considering the application and interpretation of city
ordinances, not state statutes, and accordingly disregarded the
portions of the hearing officer‘s decision that dealt with state law. No
party has argued that we need to resolve the issue of the scope of the
hearing officer‘s authority, and so we express no opinion as to that
issue.
8 The parties dispute whether on appeal we review the decision
of the City or the hearing officer; neither argues that we review the
decision of the district court. The City argues that , because the
hearing officer in this case ―perform[ed] the same review as a district
court in a petition for judicial review or an appellate court on an
appeal from that decision,‖ the decision we review is the one made
by the City, that is, by Mayor Becker. CBS counters that, under Utah
Code section 10-9a-801, the courts review only a ―final decision,‖
which Utah Code section 10-9a-708 defines as the ―written decision‖
of the ―appeal authority.‖ We disagree with both parties‘
characterization of our review. Their apparent consensus that we do
not review the decision of the district court may be attributable to
language in our previous cases suggesting that, ―[w]hen a district
court reviews an order of a local land use authority and we exercise
appellate review of the district court‘s judgment, we act as if we
were reviewing the land use authority‘s decision directly.‖ Fox v.
(Continued)
Cite as: 2017 UT 74
Opinion of the Court
7
―When a district court reviews an order of a local land use authority
and we exercise appellate review of the district court‘s judgment, . . .
we afford no deference to the district court‘s decision.‖9 The
legislature has directed that ―[t]he courts shall . . . presume that a
decision, ordinance, or regulation made under the authority of this
chapter is valid; and [] determine only whether or not the decision,
ordinance, or regulation is arbitrary, capricious, or illegal.‖10 ―A
determination of illegality requires a determination that the decision,
ordinance, or regulation violates a law, statute, or ordinance in effect
at the time the decision was made or the ordinance or regulation
adopted.‖11 The proper interpretation of a set of statutes presents a
question of law, which we review for correctness.12 We review the
interpretation of ordinances for correctness as well.13 A decision is
Park City, 2008 UT 85, ¶ 11, 200 P.3d 182. But as we have recently
noted, this language should not be understood to mean that the
district court‘s decision is a superfluity. See McElhaney v. City of
Moab, 2017 UT 65, ¶¶ 15–26, __ P.3d __. Our recent decision in
McElhaney clarified that the fact that we afford no deference to the
intermediate court does not obviate the need for parties to make and
preserve below the arguments they wish to press on appeal. Id.
¶¶ 24–25. And the lack of deference likewise does not mean that we
are not in fact reviewing the decision of the district court. So, as we
said in McElhaney, when we exercise appellate review of a district
court‘s judgment in connection with judicial review under Utah
Code section 10-9a-801, ―we review the intermediate court‘s
decision.‖ Id. ¶ 26.
9 Fox, 2008 UT 85, ¶ 11.
10 UTAH CODE § 10-9a-801(3)(a) (2016). We note that this provision
was recently amended, effective May 9, 2017. See H.B. 232, 62nd
Legislature, Gen. Sess. (2017). We apply the version of the statute
that was in effect at the time of the events relevant to this
proceeding.
11 UTAH CODE § 10-9a-801(3)(d) (2016). See Patterson v. Utah Cty.
Bd. of Adjustment, 893 P.2d 602, 604 (Utah Ct. App. 1995) (―[W]hether
or not the Board‘s decision is illegal depends on a proper
interpretation and application of the law.‖).
12 2 Ton Plumbing, L.L.C. v. Thorgaard, 2015 UT 29, ¶ 17, 345 P.3d
675.
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
8
arbitrary and capricious only if it is not supported by ―substantial
evidence,‖ which is ―that quantum and quality of relevant evidence
that is adequate to convince a reasonable mind to support a
conclusion.‖14
Analysis
¶ 13 CBS levels three challenges at the City‘s decision denying its
billboard relocation request.15 First, CBS contends that the decision
13 In the past, we ―afford[ed] some level of non-binding deference
to‖ a local agency‘s interpretation of its own ordinance. Carrier v. Salt
Lake Cty., 2004 UT 98, ¶ 28, 104 P.3d 1208. But this deference cannot
stand in view of subsequent developments in our precedent. O ur
cases since Carrier have expressly rejected the notion of affording
Chevron-style deference to state agencies‘ interpretation of statutes,
see Hughes Gen. Contractors, Inc. v. Utah Labor Comm’n, 2014 UT 3,
¶ 25, 322 P.3d 712, or regulations, see Ellis-Hall Consultants v. Pub.
Serv. Comm’n, 2016 UT 34, ¶ 21, 379 P.3d 1270. Given that we do not
defer to state agencies on pure questions of law, there is even less
reason to defer to local agencies‘ interpretations of ordinances, given
that those local agencies ―do not possess the same degree of
professional and technical expertise as their state agency
counterparts.‖ Carrier, 2004 UT 98, ¶ 28. In keeping with our recent
decisions, we review the interpretation of ordinances for correctness.
14 Bradley v. Payson City Corp., 2003 UT 16, ¶ 15, 70 P.3d 47
(citation omitted).
15 In its briefs, CBS also challenges the City‘s decision to grant
Corner Property‘s request to relocate. CBS contends that the grant of
Corner Property‘s application was illegal for two reasons. First, CBS
argues that Corner Property‘s relocated billboard would be in
violation of city ordinances regarding the permissible height and
size of billboards. Second, CBS argues that the City‘s billboard
ordinance forbids the mayor from waiving a zoning ordinance for a
billboard owner who, like Corner Property, requests to move a
billboard that is outside the spacing requirements set forth in the
Billboard Compensation Statute. But counsel for CBS conceded at
oral argument that, were we to conclude that the City‘s decision to
deny CBS‘s request to relocate its billboard was not arbitrary,
capricious, or illegal, then CBS lacks standing to challenge the grant
of Corner Property‘s request. See Oral Argument at 1:53:16–1:55:45,
https://www.utcourts.gov/opinions/streams/sup. Because we
reach just that conclusion below, we accordingly do not consider
CBS‘s arguments challenging the grant of Corner Property‘s request.
Cite as: 2017 UT 74
Opinion of the Court
9
to deny its request was illegal because Mayor Becker did not obtain
the approval of the city council before making that decision. In CBS‘s
view, such a denial is an exercise of the eminent domain power. We
reject this argument and hold that the procedural requirements of
eminent domain mandated by Utah Code section 78B-6-504 do not
apply because, under the Billboard Compensation Statute, relocation
denials are merely ―considered‖ to be the acquisition of a billboard
structure by eminent domain for compensation purposes, but these
denials do not actually involve the formal exercise of the eminent
domain power and the concomitant procedures the legislature has
prescribed to restrain the exercise of that power.
¶ 14 Second, CBS contends that Salt Lake City‘s billboard
ordinance prohibited the City from denying CBS‘s request to
relocate. That ordinance provides that ―[e]xcept as otherwise
authorized herein, existing billboards may not by relocated except as
mandated by the requirements of Utah State law.‖16 In CBS‘s view,
this means that if a relocation denial would trigger just
compensation under the Billboard Compensation Statute, then the
relocation is ―mandated by . . . State law,‖ and the City must approve
the relocation request. We find no support for this interpretation of
the ordinance in its plain language, and in any event, even if that
were the proper interpretation, it would be preempted by state law.
¶ 15 Finally, CBS argues that Mayor Becker‘s decision to deny
CBS‘s request and approve Corner Property‘s was arbitrary and
capricious because, in CBS‘s view, a city‘s mayor cannot act
according to an unwritten policy to reduce the number of billboards
in the city. We disagree. There is substantial evidence in the record
that Mayor Becker‘s administration had a goal of reducing the
number of billboards in the city, and his decision to deny CBS‘s
request and approve Corner Property‘s resulted in the net reduction
of one billboard from a gateway area in the City, directly furthering
that goal.
I. The City‘s Decision to Deny CBS‘s Billboard Relocation Request
Was Not Illegal, Because the Eminent Domain Statutes Do Not
Apply to Such Denials
¶ 16 CBS argues that the City‘s decision to deny its request to
relocate its billboard was illegal because the decision was made by
the City‘s mayor without the approval of the City‘s legislative body,
_____________________________________________________________
16 SALT LAKE CITY CODE § 21A.46.160(CC).
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
10
the city council. In CBS‘s view, the provisions of Utah Code se ctions
78B-6-501 through 522 (the Eminent Domain Statutes), especially
section 78B-6-504‘s requirement of legislative approval of a taking,
apply to the decision to deny a relocation request that triggers the
requirement of just compensation under the Billboard Compensation
Statute.
¶ 17 We disagree. The Billboard Compensation Statute neither
expressly nor impliedly incorporates the Eminent Domain Statutes,
so the procedures specified there do not apply to the denial of
relocation requests submitted under the Billboard Relocation Statute.
Instead, the Billboard Compensation Statute functions as a stand-
alone scheme, mandating the payment of compensation upon the
occurrence of certain triggering events.
¶ 18 We begin with the text of the statutes. The Billboard
Relocation Statute provides:
Notwithstanding a prohibition in its zoning ordinance,
a municipality may permit a billboard owner to
relocate the billboard within the municipality's
boundaries to a location that is mutually acceptable to
the municipality and the billboard owner . . . . If the
municipality and billboard owner cannot agree to a
mutually acceptable location within 90 days after the
owner submits a written request to relocate the
billboard, the provisions of Subsection 10-9a-
513(2)(a)(iv) apply.17
The Billboard Compensation Statute provides, in pertinent
part:
A municipality is considered to have initiated the
acquisition of a billboard structure by eminent domain
if the municipality prevents a billboard owner from . . .
relocating a billboard into any commercial, industrial,
or manufacturing zone within the municipality‘s
boundaries, if [certain spacing requirements are met];
and . . . the billboard owner has submitted a written
request under Subsection 10-9a-511(3)(c); and . . . the
municipality and billboard owner are unable to agree,
_____________________________________________________________
17 UTAH CODE § 10-9a-511(3)(c).
Cite as: 2017 UT 74
Opinion of the Court
11
within the time provided in Subsection 10-9a-511(3)(c),
to a mutually acceptable location[.]18
¶ 19 In sum, the Billboard Relocation Statute permits a
municipality to agree to a billboard relocation request that would
otherwise be prohibited by the city‘s zoning ordinance. But if the city
does not agree to a relocation request, and that request meets certain
spacing requirements, the city is ―considered‖ under the Billboard
Compensation Statute to have ―initiated the acquisition of the
billboard structure by eminent domain.‖
¶ 20 The Eminent Domain Statutes, on the other hand, offer a
host of procedural protections for property owners. Particularly
relevant here, Utah Code section 78B-6-504(2)(b) provides that
―[p]roperty may not be taken by a political subdivision of the state
unless the governing body of the political subdivision approves the
taking.‖ The parties agree that the ―governing body‖ here is the Salt
Lake City Council and that the city council did not participate in the
decision to deny CBS‘s relocation request.
¶ 21 CBS argues that the Eminent Domain Statutes apply
because, in its view, the denial of its request to relocate a billboard
constitutes a physical taking of the billboard. It points to the
common textual link between the Billboard Compensation Statute
and the Eminent Domain Statutes: both use the phrase ―eminent
domain.‖ The Billboard Compensation Statute provides that the City
―is considered to have initiated the acquisition of a billboard
structure by eminent domain‖ in certain circumstances, and the
Eminent Domain Statutes set procedures to constrain the exercise of
the eminent domain power. According to CBS, because the Billboard
Compensation Statute tells the City the circumstances in which its
denial of a relocation request will constitute an ―acquisition by
eminent domain,‖ the City is formally exercising its power of
_____________________________________________________________
18 Id. § 10-9a-513(2)(a)(iv). The Billboard Compensation Statute
also mandates compensation in other circumstances, for example
where a municipality ―prevents a billboard owner from . . .
rebuilding, maintaining, repairing, or restoring a billboard structure
that is damaged by casualty, an act of God, or vandalism‖ or from
making certain structural modifications or upgrades. Id. §§ 10-9a-
513(2)(a)(i), (ii), (iii). Because this case features the denial of a request
to relocate, we accordingly focus our discussion on that aspect of the
Billboard Compensation Statute.
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
12
eminent domain and acquiring the billboard whenever it denies such
a relocation request. And formal use of that power, CBS argues,
necessitates compliance with the Eminent Domain Statutes.
¶ 22 CBS draws support for its position from Utah Department of
Transportation v. Carlson,19 claiming that case stands for the principle
that, although the permissible public uses for eminent domain are
scattered throughout the code, they are all subject to the general
requirements of the Eminent Domain Statutes. Additionally, CBS
argues that it makes good sense to require the legislative body‘s
approval before the City denies a relocation request, given that
condemnation is often expensive, and that the city council is the
body typically tasked with budgetary responsibilities.
¶ 23 The City20 contends that the Eminent Domain Statutes do
not apply to billboard relocation denials. Like CBS, the City begins
with the text of the Billboard Compensation Statute. The City points
out that neither the Billboard Relocation Statute nor the Billboard
Compensation Statute incorporates the Eminent Domain Statutes by
explicit textual reference. The City argues that the absence of a
specific incorporation was a purposeful omission, indicating the
legislature‘s intent that the Eminent Domain Statutes do not apply.
The City also rebuts CBS‘s concern about fiscal responsibility,
arguing that the city council, though tasked with general budget
creation, does not oversee every action with financial
consequences.21 We agree with the City on each point.
_____________________________________________________________
19 2014 UT 24, 332 P.3d 900.
20 Corner Property‘s arguments largely track the City‘s, so
reference to the City‘s arguments includes both the City and Corner
Property unless otherwise noted.
21 The City also argues that legislative history confirms that the
Billboard Compensation Statute does not incorporate the Eminent
Domain Statutes, citing a failed bill that would have required
compliance with the Eminent Domain Statutes in the context of the
Billboard Compensation Statute. Additionally, the City argues that
the absurd consequences canon supports its interpretation,
describing several absurd consequences that would follow from
adopting CBS‘s interpretation. Because we conclude that the statute
unambiguously compels the City‘s interpretation, we have no need
to employ these auxiliary tools of statutory construction here. See
Bagley v. Bagley, 2016 UT 48, ¶ 10, 387 P.3d 1000 (―When we can
ascertain the intent of the legislature from the statutory terms alone,
(Continued)
Cite as: 2017 UT 74
Opinion of the Court
13
¶ 24 Under the plain text of the Billboard Compensation Statute,
a municipality ―is considered to have initiated the acquisition of a
billboard structure by eminent domain‖ when it takes certain
actions.22 The statute does not say that a municipality must acquire a
billboard structure by eminent domain in those circumstances.23
Instead, we read the plain language to simply specify that, for
compensation purposes, a municipality will be considered to have
acquired it. ―Consider‖ in this context means ―[t]o regard in a certain
light or aspect; to look upon (as), think (to be), tak e for.‖24 In other
words, ―consider‖ in this context means ―will be treated for present
purposes as though it has, whether in fact it has or not.‖25 We
accordingly read the Billboard Compensation Statute to treat a
denial under the Billboard Relocation Statute as an acquisition for
compensation purposes only, even though the denial itself is not an
acquisition.
‗no other interpretive tools are needed,‘ and our task of statutory
construction is typically at an end.‖ (citation omitted)).
22 UTAH CODE § 10-9a-513(2)(a).
23 CBS‘s argument is driven in part by its flawed assumption that
the City has ―require[d] termination‖ of CBS‘s billboard. In fact, it
has done no such thing. It is true that Utah Code section 10-9a-512
states that a ―municipality may only require termination of a
billboard and associated property rights through . . . eminent
domain‖ or by voluntary transfer. Were the City indeed requiring
termination of CBS‘s billboard, a different analysis may very well
apply. But here, it is the termination of its lease from Corner
Property, and not an action of the City, that is requiring CBS to
terminate its billboard. The fact that the legislature has mandated
that the City pay compensation for some relocation denials does not
transform the City‘s action into one ―requir[ing] termination‖ of the
billboard.
24 Consider, OXFORD ENGLISH DICTIONARY ONLINE (June 2017),
http://www.oed.com/view/Entry/39593?redirectedFrom=consider
(last visited September 29, 2017).
25 The legislature frequently uses the word ―considered‖ in this
sense—to treat something in a certain way. See, e.g., UTAH CODE § 75-
2-104(1)(a) (―An individual born before a decedent‘s death who fails
to survive the decedent by 120 hours is considered to have
predeceased the decedent.‖ (emphasis added)).
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
14
¶ 25 This reading of the Billboard Compensation Statute is
confirmed by subsection 2(d) of that statute. That subsection
provides that ―[i]f a municipality is considered to have initiated the
acquisition of a billboard structure by eminent domain under
Subsection 2(a) . . . the municipality shall pay just compensation to
the billboard owner in an amount‖ specified in that subsection.26 So
the Billboard Compensation Statute creates a stand-alone scheme
that functions without interface with the Eminent Domain Statutes:
subsection 2(a) describes certain triggering conditions and
subsection 2(d) describes what compensation must be paid when
those conditions occur.
¶ 26 Our reading of the statute is confirmed by two well-worn
canons of statutory construction: the canon of independent meaning
and the canon of meaningful variation. And our reading is not
contradicted by CBS‘s argument about the delegation of fiscal
responsibility in city government. We discuss each point in turn.
A. The Canon of Independent Meaning Confirms that the
Eminent Domain Statutes Do Not Apply
¶ 27 CBS‘s argument overlooks the legislature‘s use of the word
―considered,‖ essentially writing it out of the statute. In CBS‘s view,
by denying a relocation request that meets the spacing requirements,
the City acquires the billboard by eminent domain. In essence, CBS‘s
interpretation would rewrite the statute as follows: ―a municipality
is considered to have initiated the acquisition of has acquired a
billboard structure by eminent domain‖ when it denies a relocation
request that meets the spacing requirements. But to make this
change violates a core principle of statutory interpretation —our
distaste for superfluity. That is, we avoid reading statutes in a way
that renders portions inoperative. Instead, we seek to read them in a
way that gives effect to each word and phrase.27
¶ 28 CBS‘s reading fails to give any independent meaning to the
word ―considered.‖ On this basis alone, there seems to be good
reason to reject CBS‘s reading of the statute. But CBS‘s reading also
_____________________________________________________________
26 UTAH CODE § 10-9a-513(2)(d).
27 See, e.g., Turner v. Staker & Parson Cos., 2012 UT 30, ¶ 12, 284
P.3d 600 (―Wherever possible, we give effect to every word of a
statute, avoiding ‗[a]ny interpretation which renders parts or words
in a statute inoperative or superfluous.‘‖ (alteration in original)
(citation omitted)).
Cite as: 2017 UT 74
Opinion of the Court
15
runs afoul of another canon: the canon that different words used in
similar statutes are presumed to have different meanings.
B. The Canon of Meaningful Variation Confirms that the
Eminent Domain Statutes Do Not Apply
¶ 29 Our conclusion is supported by the fact that the Billboard
Compensation Statute lacks an express or implied textual cross-
reference to the Eminent Domain Statutes. CBS seeks to show that
the Eminent Domain Statutes apply by placing the Billboard
Compensation Statute alongside a group of statutes that bestow the
eminent domain power on municipalities. But this analogy is
inapposite—comparing the Billboard Compensation Statute to these
statutes reveals it to be an apple among oranges. The statutes to
which CBS attempts to analogize all feature a common trait that the
Billboard Compensation Statute lacks: each one grants the power of
eminent domain to a municipality or agency. These statutes provide
that an entity ―may acquire land . . . by eminent domain‖28 or ―may
exercise eminent domain.‖29 Typically, though not universally, these
statutes include a specific textual cross-reference incorporating the
provisions of the Eminent Domain Statutes.30
¶ 30 Standing in stark contrast is the Billboard Compensation
Statute, which provides that a municipality ―is considered to have
initiated the acquisition . . . by eminent domain‖ in certain
circumstances.31 No other statutory provision uses the word
―considered‖ in the context of eminent domain. We thus view the
_____________________________________________________________
28 See, e.g., UTAH CODE § 69-3-2.
29 See, e.g., id. § 73-26-404; id. § 73-23-3(3).
30 See, e.g., id. § 17B-2a-820 (―The state, a county, or a municipality
may, by eminent domain under Title 78B, Chapter 6, Part 5, Eminent
Domain, acquire within its boundaries a private property interest,
including fee simple, easement, air right, right-of-way, or other
interest, necessary for the establishment or operation of a public
transit district.‖); id. § 73-26-404 (―In order to construct the reservoirs
and other facilities authorized under this chapter, the division may
exercise eminent domain as provided in Title 78B, Chapter 6, Part 5,
Eminent Domain.‖). But see, e.g., id. § 73-23-3(3) (―Division of Water
Resources . . . may acquire land or any other property right by any
lawful means, including eminent domain . . . .‖).
31 Id. § 10-9a-513(2)(a) (emphasis added).
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
16
Billboard Compensation Statute as something of a unique animal,
and we do not find it analogous to statutes granting the power of
eminent domain. While the Billboard Compensation Statute uses the
term ―eminent domain,‖ it neither explicitly cross-references the
Eminent Domain Statutes, nor implies such a reference through the
use of language similar to statutes that grant the power of eminent
domain. Instead, under the terms of the statute, the City is not
―acquiring‖ land or ―exercising‖ eminent domain, but it is merely
―considered to have initiated the acquisition of a billboard structure
by eminent domain.‖ That difference is significant.
¶ 31 The canon of meaningful variation suggests that ―[d]ifferent
words used in . . . a similar[] statute . . . are assigned different
meanings whenever possible.‖32 We accord the Billboard
Compensation Statute‘s different words ―considered to have
initiated‖ different meanings by construing this section to operate as
a standalone scheme, rather than incorporating the Eminent Domain
Statutes.
¶ 32 For this reason, CBS‘s reliance on Utah Department of
Transportation v. Carlson is misplaced. In that case, we described a
number of statutes that grant the power of eminent domain. CBS
correctly points out that we recognized in Carlson that the legislature
has ―authoriz[ed]‖ the use of ―eminent domain across a wide range
of statutory provisions.‖33 And there is a solid basis for CBS‘s
position that, though these grants of the eminent domain power are
scattered throughout the code, each is constrained by the Eminent
Domain Statutes. But none of those statutes provides that a
municipality ―is considered to have initiated the acquisition of a
billboard structure by eminent domain‖34 if it denies a relocation
request under certain conditions. So, again, the use of the word
―considered‖ makes a great deal of difference, and distinguishes the
Billboard Compensation Statute from statutes that actually grant the
power of eminent domain. We now turn to CBS‘s argument
regarding the fiscal impact of denying a billboard relocation request.
_____________________________________________________________
32 SUTHERLAND STATUTES & STATUTORY CONSTRUCTION 2A
Sutherland Statutory Construction § 46:6 (7th ed. 2016); see also City
Ctr. Exec. Plaza, LLC v. Jantzen, 344 P.3d 339, 344 (Ariz. Ct. App.
2015).
33 2014 UT 24, ¶ 21.
34 UTAH CODE § 10-9a-513(2)(a) (emphasis added).
Cite as: 2017 UT 74
Opinion of the Court
17
C. The Fiscal Impact of a Relocation Denial Does Not Make It an
Exercise of the Eminent Domain Power
¶ 33 Finally, we address CBS‘s argument regarding the fiscal
impact of a relocation denial. CBS argues that it would be anomalous
to interpret the Billboard Compensation Statute to permit the City‘s
mayor to unilaterally exercise the power of eminent domain. CBS
argues that it is the City Council that is charged with ―drafting
ordinances,‖35 ―controlling finances and property,‖36 and
―purchasing property.‖37
¶ 34 The City points out that the division of labor in a mayor -
council form of city government assigns to the mayor a host of
functions, and though the city council sets the general budget and
appropriations, many of the mayor‘s actions expend fiscal resources
without specific council approval. Though CBS is right that
condemnation can be an expensive decision, that fact alone does not
override the legislature‘s decision to merely ―consider‖ relocation
denials to be an acquisition by eminent domain. Where the language
employed by the legislature contains no intent to incorporate the
Eminent Domain Statutes, it is not our role to expand the otherwise
limited text of the Billboard Compensation Statute and infer such an
incorporation out of concern that good policy requires it.38
¶ 35 In sum, the Eminent Domain Statutes do not apply to
actions that may trigger the Billboard Compensation Statute. We
interpret the Billboard Compensation Statute to mean that, by
denying billboard relocation requests that meet the spacing
requirements, the City is considered to have initiated the acquisition
_____________________________________________________________
35 Citing UTAH CODE § 10-3b-203.
36 Citing id. §§ 10-6-101, 10-8-1.
37 Citing id. §§ 10-3b-203(1), 10-8-1.
38 See, e.g., Univ. of Utah v. Shurtleff, 2006 UT 51, ¶ 53, 144 P.3d
1109 (―No matter how persuasive we may find such arguments, we
are constrained by our judicial role. Our role is one of interpreting,
not drafting.‖); see also Hughes Gen. Contractors, Inc. v. Utah Labor
Comm’n, 2014 UT 3, ¶ 29, 322 P.3d 712 (―[T]he interpretive function
for us is not to divine and implement the statutory purpose, broadly
defined. It is to construe its language. Where, as here, that language
dictates an answer to the question presented, we are not at liberty to
adopt a different one . . . .‖).
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
18
of a billboard structure by eminent domain, solely for purposes of
just compensation as dictated in that section. Because ―considered‖
in this context means ―to look upon (as),‖ we conclude that
relocation denials that meet the spacing requirements are only to be
looked upon as acquisitions by eminent domain, though in fact they
are not.
II. The City‘s Decision to Deny CBS‘s Request Did Not Violate the
City‘s Billboard Ordinance
¶ 36 CBS next challenges the denial of its relocation request as
violating Salt Lake City‘s Billboard Ordinance. That ordinance
provides, in relevant part:
State Mandated Relocation of Billboards: Except as
otherwise authorized herein, existing billboards may
not be relocated except as mandated by the
requirements of Utah state law.39
¶ 37 In CBS‘s view, a relocation is ―mandated‖ by state law—and
therefore the City must approve a relocation request—when a denial
would trigger a right to just compensation under the Billboard
Compensation Statute. We reject CBS‘s reading. It misreads the plain
language of the ordinance. Nothing in the ordinance mandates that
certain relocation requests be granted. The ordinance, on its face,
speaks only to the conditions under which relocation will not be
allowed. And in any event, the Billboard Compensation Statute does
not mandate relocation of any billboard; it simply specifies
circumstances where just compensation must be paid if relocation is
denied. The statute gives the municipality the option of permitting
the relocation, or denying it and paying just compensation. It
nowhere mandates that relocation be permitted to occur. So CBS‘s
reading of the ordinance is misguided. But even if the ordinance had
the meaning that CBS assigns it, it would be preempted by state law.
¶ 38 If CBS‘s interpretation were correct—that the ordinance
means that the City must grant relocation requests where denying
them would require just compensation—then the ordinance would
be preempted by the Billboard Relocation Statute. The City correctly
points out that ―[i]t is well established that, where a city ordinance is
in conflict with a state statute, the ordinance is invalid at its
inception. ‗In determining whether an ordinance is in ―conflict‖ with
_____________________________________________________________
39 SALT LAKE CITY CODE § 21A.46.160(CC).
Cite as: 2017 UT 74
Opinion of the Court
19
general laws, the test is whether the ordinance permits or licenses
that which the statute forbids and prohibits, and vice versa.‘‖40
¶ 39 Here, the Billboard Relocation Statute gives the City
discretion to grant or deny requests for billboard relocation.41 No
ordinance can effectively prohibit the City from exercising that
discretion. CBS reads the ordinance to forbid the City from denying
some relocation requests—those that fall within the spacing
requirements that trigger the just compensation requirement under
the Billboard Compensation Statute. But the Billboard Relocation
Statute expressly permits the City to deny such requests, so long as it
pays just compensation. This argument therefore fails.
III. The City‘s Decision to Deny CBS‘s Request and Grant Corner
Property‘s Was Not Arbitrary and Capricious, Because It Furthered
the City‘s Goal of Reducing the Number of Billboards in
―Gateway‖ Areas
¶ 40 CBS argues that the City‘s stated purpose for denying its
application—that it was doing so in accordance with its
longstanding policy in favor of retiring and removing billboards—
was arbitrary and capricious. A decision is arbitrary and capricious
when it is not supported by ―substantial evidence.‖42 Substantial
evidence is that ―quantum and quality of relevant evidence that is
adequate to convince a reasonable mind to support a conclusion.‖43
CBS argues that the City‘s decisions were arbitrary and capricious
because 1) no policy of billboard reduction exists in written form; 2)
even if there were a policy, the executive branch cannot make
―policy,‖ only the legislative body can; and 3) even if unwritten
policies of the executive are acceptable, the executive cannot have a
policy that conflicts with an ordinance. We reject the first two
arguments, and, even if we agreed with the premise of the third—
_____________________________________________________________
40 Hansen v. Eyre, 2005 UT 29, ¶ 15, 116 P.3d 290 (citations
omitted).
41 ―Notwithstanding a prohibition in its zoning ordinance, a
municipality may permit a billboard owner to relocate the billboard
within the municipality‘s boundaries to a location that is mutually
acceptable to the municipality and the billboard owner.‖ UTAH CODE
§ 10-9a-511 (3)(c)(i) (emphasis added).
42 UTAH CODE § 10-9a-801(3)(c).
43 Bradley v. Payson City Corp., 2003 UT 16, ¶ 15, 70 P.3d 47
(citation omitted).
OUTFRONT MEDIA v. SLC CORP.
Opinion of the Court
20
that an executive‘s policy cannot conflict with an ordinance—we see
no such conflict here.
¶ 41 First, we agree with the City that there is substantial
evidence that Mayor Becker had a policy of reducing billboards. The
City points to, and CBS does not refute, several pieces of evidence to
this effect. For example, Mayor Becker submitted a declaration
referring to his ―longstanding policy to reduce the total number of
billboards within the City.‖ Mayor Becker publicly announced this
policy several times, including in his 2013 State of the City address.
The City also entered into numerous agreements under Mayor
Becker‘s direction to limit the ability of property owners to place
billboards on their property. We agree with the City that this
constitutes substantial evidence that the Becker administration had a
policy of reducing the number of billboards in the City.
¶ 42 The next question is whether such a policy needs to be in
writing to be valid. We conclude that it does not. We see no reason
why a city executive is not entitled to have informal policies, i.e.,
objectives, goals, or standards that he or she applies in carrying out
the executive function. Informal executive policies represent an effort
to administer consistently, and we agree with the City that an
executive branch of city government can make decisions in
accordance with informal goals and objectives.
¶ 43 In the end, we are left with CBS‘s argument that the Becker
administration‘s policy of reducing billboards is inconsistent with
the City‘s Billboard Ordinance. The Billboard Ordinance provides:
This section is intended to limit the maximum number
of billboards in Salt Lake City to no greater than the
current number. This chapter further provides
reasonable processes and methods for the replacement
or relocation of existing nonconforming billboards to
areas of the city where they will have less negative
impact on the goals and policies of the city which
promote the enhancement of the city‘s gateways,
views, vistas and related urban design elements of the
city‘s master plans.44
¶ 44 The question here is whether a policy of actively reducing the
number of billboards is in conflict with a policy to ―limit‖ the
number of billboards to ―no greater than the current number.‖ We
conclude that there is no conflict in these policies. If the mayor had a
_____________________________________________________________
44 SALT LAKE CITY CODE § 21A.46.160(A).
Cite as: 2017 UT 74
Opinion of the Court
21
policy of increasing the number of billboards in the city, then this
policy would conflict with the ordinance. But a policy of reducing
the total number of billboards is consistent with the goal of
―limit[ing]‖ the number of billboards to no greater than the current
number.
¶ 45 Mayor Becker‘s decision in this case had exactly that effect.
By denying CBS‘s relocation request and granting Corner Property‘s,
he achieved the net reduction of one billboard, and it was a billboard
located in a ―gateway‖ area—an area that the City has prioritized as
important for protecting the aesthetics of the City. Accordingly, the
mayor‘s decision to deny CBS‘s relocation request and grant Corner
Property‘s was not arbitrary and capricious.
Conclusion
¶ 46 We affirm the conclusion that the City‘s decision to deny
CBS‘s request to relocate its billboard was not arbitrary, capricious,
or illegal. The Eminent Domain Statutes do not apply in the context
of the Billboard Compensation Statute, so the City was not required
to seek city council approval before denying CBS‘s request. The
City‘s Billboard Ordinance does not forbid the City from denying a
billboard relocation request that fits within the spacing requirements
of the Billboard Compensation Statute. And Mayor Becker‘s decision
was not arbitrary and capricious because it furthered his established
goal of achieving a net reduction in the number of billboards in
gateway areas.
Civil Action No. 13-11028-NMG
United States District Court, D. Massachusetts.
OA VW LLC v.Massachusetts Department of Transportation
76 F. Supp. 3d 374 (D. Mass. 2015)
Decided Jan 6, 2015
Civil Action No. 13–11028–NMG.
2015-01-06
OA VW LLC and Outfront Media Boston LLC,
Plaintiffs, v. MASSACHUSETTS
DEPARTMENT OF TRANSPORTATION,
Massachusetts Office of Outdoor Advertising,
Richard A. Davey and Edward J. Farley,
Defendants.
GORTON, District Judge.
Elizabeth Abimbola Thomas, Henry C. Dinger,
Katherine Connolly Sadeck, Michael K. Murray,
Goodwin Procter LLP, Boston, MA, for Plaintiffs.
Sookyoung Shin, Office of the Attorney General,
Boston, MA, for Defendants.
*375375
Elizabeth Abimbola Thomas, Henry C. Dinger,
Katherine Connolly Sadeck, Michael K. Murray,
Goodwin Procter LLP, Boston, MA, for Plaintiffs.
Sookyoung Shin, Office of the Attorney General,
Boston, MA, for Defendants.
MEMORANDUM AND ORDER
GORTON, District Judge.
Plaintiffs OA VW LLC and Outfront Media
Boston LLC (collectively “Outfront”) bring this
action challenging the enforceability of 700
C.M.R. § 3.07 et seq. , which are regulations of
outdoor advertising promulgated in 2012 by
defendant Massachusetts Department of
Transportation (“MassDOT”). Their complaint
also names as defendants the Massachusetts Office
of Outdoor Advertising (“OOA”), which is a
subdivision of the Highway Division of
MassDOT, Richard Davey, the Secretary of
Transportation and Edward *376 Farley, the
Director of the OOA in their official capacities.
1
376
1 The original plaintiffs in this action, Van
Wagner Communications, LLC and Van
Wagner Boston, LLC were recently
acquired and are now indirect wholly-
owned subsidiaries of Outfront Media Inc.,
a publicly-traded company. After the
acquisition was completed, plaintiffs
changed their names to OA VW LLC and
Outfront Media Boston LLC, respectively.
I. Background
A. History of the Massachusetts
Office of Outdoor Advertising
In 1946 the Massachusetts legislature amended
M.G.L. c. 93 to vest exclusive authority to
regulate outdoor advertising in the Outdoor
Advertising Authority (“OAA”). The OAA was
controlled by a three-member board, appointed by
the governor. In 1955 the OAA was renamed the
Outdoor Advertising Board (“OAB”).
In 1965 Congress enacted the Federal Highway
Beautification Act (“FHBA”) which provides for
the regulation and control of “outdoor advertising
signs, displays, and devices in areas adjacent to”
interstate and federal-aid primary highways. 23
U.S.C. § 131(a). Under the FHBA, in order to
receive full allotment of federal highway funds,
each state must ensure that outdoor advertising
1
near federal highways in the state conform to
“size, lighting and spacing” requirements “to be
determined by agreement” with the U.S.
Department of Transportation.
Massachusetts entered into such an agreement
with the federal government in 1971 (“the
Federal/State Agreement”) following the
enactment of M.G.L. c. 93D to ensure compliance
with the FHBA. The text of the Federal/State
Agreement indicates that it applies to
all zoned and unzoned commercial and
industrial areas within 600 feet of the
nearest edge of the right-of-way of all
portions of the Interstate and primary
systems within the Commonwealth of
Massachusetts in which outdoor
advertising, signs, displays and devices
may be visible from the main traveled way
of said systems.
In 2009 the Massachusetts legislature enacted
M.G.L. c. 6C (“the 2009 Transportation Act”),
which repealed the statutes that created OAB and
consolidated several state agencies into MassDOT.
The Act authorizes MassDOT to “exercise any
powers necessary for the commonwealth to be in
compliance with” its obligation under FHBA.
Early drafts of the legislation expressly delegated
the OAB's broader authority to a new entity but
none of those was enacted. The Commonwealth
maintains that OAB was “integrated” into
MassDOT while plaintiffs contend that the Act
eliminated the OAB without conveying its powers
to MassDOT or to any other entity.
In November, 2009, MassDOT adopted temporary
regulations which essentially mirrored those that
had been in place under OAB but also created
defendant Massachusetts Office of Outdoor
Advertising (“OOA”) to replace the OAB. The
OOA is administered by a single Director with
permit granting authority. In June, 2012,
MassDOT proposed further regulatory changes
which went into effect in December, 2012 (“New
Regulations”).
B. New Regulations
Plaintiffs assert that the New Regulations impose
numerous restrictions on off-premise signs that
were not explicitly authorized by the
Massachusetts legislature. In particular, plaintiffs
contend that the 2009 Transportation Act did not
create an entity to succeed the OAB and
authorized MassDOT to regulate outdoor
advertising only to the extent necessary to ensure
compliance with the FHBA and the Federal/State
Agreement. Plaintiffs claim that the New
Regulations do far more than that, including that
they regulate outdoor advertising everywhere in
the Commonwealth rather than just advertising
near an Interstate Highway.*377 Plaintiffs object
specifically to the language of 700 C.M.R. §
3.07(4) which states:
377
No permit shall be granted for a sign
which the Director, in its discretion,
determines would not be in harmony with
or suitable for the surrounding area or
would do significant damage to the visual
environment. In making this
determination, the Director may consider,
among other factors, the health, safety and
general welfare of the public; the scenic
beauty of the area; the physical,
environmental, cultural, historical or
architectural characteristics of the location
and the area; the structure, height and size
of the sign; the illumination and brightness
of the sign; and the number of signs,
including on premise and accessory use
signs, which are in the area wherein the
sign is to be located. The existence of any
sign or signs in an area shall not require a
finding that the erection of another sign
will be in harmony with the area.
Plaintiffs further protest that the subject provision
of the New Regulations gives the Director
“unbridled discretion” over permitting decisions
and that such standardless discretion constitutes an
unconstitutional prior restraint on their First
Amendment right of free speech.
2
OA VW LLC v. Massachusetts Department of Transportation 76 F. Supp. 3d 374 (D. Mass. 2015)
II. Procedural history
In April, 2013, plaintiffs filed a complaint seeking
declaratory judgments that 1) MassDOT lacks
authority to impose the New Regulations (Count
I), 2) the New Regulations violate plaintiffs' First
Amendment rights (Count II), 3) by promulgating
and enforcing the New Regulations defendants
have a) deprived plaintiffs of rights secured by the
First and Fourteenth Amendments and § 1983
(Count III) and b) deprived plaintiffs of their right
to free speech under Article 16 of the
Massachusetts Constitution (Count IV) and 4)
defendants violated the Massachusetts
Administrative Procedures Act when they adopted
substantive changes to the proposed regulations
without holding a public hearing (Count V).
Plaintiffs also filed a motion for preliminary
injunction to enjoin defendants from enforcing the
New Regulations. Defendants, in response, moved
to dismiss the case.
Oral argument on plaintiffs' motion for
preliminary injunction and defendants' motion to
dismiss was held in June, 2013. The following
month, this Court allowed the defendants' motion
to dismiss after concluding that the plaintiffs
lacked standing to raise their First Amendment
challenge because they have not identified any
injury in fact as a result of 700 C.M.R. § 3.07(4).
Plaintiffs appealed the dismissal of Counts I, III,
IV and V to the First Circuit Court of Appeals.
In October, 2014, the First Circuit reversed this
Court's holding on the standing issue, reinstated
the pendant state law claims and remanded the
case. It expressed no opinion on the merits of
plaintiffs' claims.
In November, 2014, defendants filed a renewed
motion to dismiss Counts I, IV and V and to stay
Count III. For the reasons that follow, defendants'
motion will be denied without prejudice.
III. Defendants' renewed motion to
dismiss
A. Counts I, IV and V (the State Law
Claims)
Defendants contend that plaintiffs' state law claims
are barred by the Eleventh Amendment under
Pennhurst State School & Hospital v. Halderman,
465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984).
They argue that the Court lacks subject matter
jurisdiction over those claims because the
Eleventh Amendment to the *378 United States
Constitution bars federal courts from instructing
state officials on how to conform their conduct to
state law. Id. at 103–106, 121, 104 S.Ct. 900.
378
Plaintiffs respond that Pennhurst does not apply to
claims that state officials are acting in a manner
that is ultra vires their authority. They contend that
MassDOT has not been delegated general
regulatory power over outdoor advertising and that
the only authority that the Massachusetts
legislature gave to MassDOT is the power to take
steps “necessary” to comply with the “size,
lighting and spacing” requirements in the
Federal/State Agreement.
Plaintiffs rely on Larson v. Domestic & Foreign
Commerce Corp., 337 U.S. 682, 69 S.Ct. 1457, 93
L.Ed. 1628 (1949), which ruled that the doctrine
of sovereign immunity does not apply to a claim
challenging the actions of government officials
that exceed the scope of the officials' legal
authority:
[W]here the officer's power are limited by
statute, his actions beyond those
limitations are considered individual and
not sovereign actions .... His actions are
ultra vires his authority and therefore may
be made the object of specific relief.
337 U.S. at 689, 69 S.Ct. 1457. The Court
emphasized that sovereign immunity is not
implicated in such context
only because of the officer's lack of
delegated power. A claim of error in the
exercise of that power is therefore not
sufficient.
3
OA VW LLC v. Massachusetts Department of Transportation 76 F. Supp. 3d 374 (D. Mass. 2015)
Id. at 690, 69 S.Ct. 1457.
The Court in Pennhurst rejected a broader version
of the ultra vires doctrine advanced by the dissent
but nevertheless recognized that the exception
applies where a state officer “acts without any
authority whatever.” Pennhurst, 465 U.S. at 102 n.
11, 104 S.Ct. 900 (quoting Florida Dep't of State
v. Treasure Salvors, Inc., 458 U.S. 670, 697, 102
S.Ct. 3304, 73 L.Ed.2d 1057 (1982) ). The
Eleventh Amendment therefore does not prevent
federal courts from enjoining state officials from
engaging in acts that the officials have no
authority to take. Pennhurst re-affirmed the
Larson Court's holding that the ultra vires
exception rests on “the officer's lack of delegated
power.”Id. (quoting Larson, 337 U.S. at 690, 69
S.Ct. 1457 ). The test for determining the
applicability of such exception is “whether the
[officer's] action, even if legally erroneous, was
beyond the scope of his statutory authority.”
Muirhead v. Mecham, 427 F.3d 14, 20 (1st
Cir.2005).
Contrary to defendants' assertion, the existence of
the ultra vires exception has been recognized in
cases following Pennhurst. See, e.g., Miami
University Associated Student Government v.
Shriver, 735 F.2d 201 (6th Cir.1984) (holding that
plaintiffs plausibly contended that the university's
regulation of off-campus automobile use was
beyond their statutory authority but leaving to the
district court the question of whether the
regulations were in fact ultra vires ); Word of
Faith World Outreach Center Church v. Morales,
986 F.2d 962 (5th Cir.1993) (holding that the
Eleventh Amendment did not prevent a federal
court from enjoining the state Attorney General
from seeking documents from and prosecuting the
plaintiff church when the applicable statute
authorized such action against some parties but
not against the church).
The cases relied upon by the Commonwealth in
which the court refused to apply the ultra vires
doctrine are distinguishable because they involve
claims against state officials who were granted
general regulatory power but acted erroneously
within the scope of their authority. See, e.g., *379
Bad Frog Brewery, Inc. v. N.Y. State Liquor
Author., 1996 WL 705786 (N.D.N.Y. Dec. 5,
1996) (state law gave the regulators general
authority to regulate the labels on alcoholic
beverages which plaintiff argued was abused);
Mississippi Surplus Lines Ass'n v. State of
Mississippi, 384 F.Supp.2d 982, 986
(S.D.Miss.2005) (“it cannot reasonably be
contended [that the state official] lack[ed]
authority under state law to take the challenged
actions”).
379
Here, the parties dispute the scope of regulatory
authority afforded to MassDOT which, in turn,
affects this Court's jurisdiction over the plaintiffs
state law claim. Defendants contend that the
Eleventh Amendment bars this Court's subject
matter jurisdiction because MassDOT has a
colorable basis of authority under state law. They
emphasize that the Massachusetts Constitution
permits state regulation of outdoor advertising and
that the 2009 Transportation Act never repealed
Chapter 93 of the General Laws, which delegated
to the OAB broad authority to regulate billboards
“within public view of any highway, public park
or reservation.” Mass. Const. Amend., Art. 50 ;
M.G.L c. 93, §§ 29 –33.
Plaintiffs, on the other hand, assert that MassDOT
lacks any state law authority to adopt regulations
governing outdoor advertising other than those
“necessary” to implement “size, lighting and
spacing” requirements prescribed by federal law
and therefore the Eleventh Amendment is
inapplicable because the challenged regulations
are ultra vires.
This Court has authority to determine its own
jurisdiction. See United States v. Ruiz, 536 U.S.
622, 628, 122 S.Ct. 2450, 153 L.Ed.2d 586 (2002)
(“it is familiar law that a federal court always had
jurisdiction to determine its own jurisdiction”).
The crucial question is whether the 2009
4
OA VW LLC v. Massachusetts Department of Transportation 76 F. Supp. 3d 374 (D. Mass. 2015)
Transportation Act gave MassDOT broad power
to regulate outdoor advertising in Massachusetts
or limited such power to that necessary to
implement the restrictions imposed by the FHBA.
That is a question of state law interpretation.
A federal court may, in its discretion, certify to the
Massachusetts Supreme Judicial Court (“the SJC”)
a question of Massachusetts law that is
“determinative of the cause then pending in the
certifying court” and as to which “it appears to the
certifying court there is no controlling precedent
in the decisions of [the SJC].” Mass. S.J.C.R.
1:03; see also In re Hundley, 603 F.3d 95, 98 (1st
Cir.2010). The Court concludes that the
dispositive question here satisfies both criteria for
certification and therefore will defer to the
judgment of Commonwealth's highest court.
If the SJC holds that MassDOT lacked statutory
authority to promulgate the challenged
regulations, then the Eleventh Amendment will
not preclude an injunction against enforcement of
those regulations and plaintiffs' First Amendment
claim will become moot. If the SJC determines
that MassDOT had the requisite authority, then
plaintiffs' state law claim will be dismissed on
jurisdictional grounds and this Court will proceed
to resolve plaintiffs' First Amendment claim.
Accordingly, defendants' motion to dismiss
Counts I, IV and V will be denied without
prejudice.
B. Count III (the Federal Claim)
Defendants contend that the Court should abstain
from deciding plaintiffs' First Amendment claim
under the Pullman doctrine. Railroad Comm'n v.
Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed.
971 (1941).
Pullman abstention is a discretionary doctrine
with equitable moorings that are implicated when
a federal court is confronted with an allegation
that a state law violates federal rights. The
doctrine *380 directs federal courts to abstain from
deciding an issue, thus avoiding needless friction
with state policies and unnecessary constitutional
rulings when a state court construction of the law
may obviate its need to do so. Pullman abstention
is warranted where
380
1) substantial uncertainty exists over the
meaning of the state law in question, and
2) settling the question of state law will or
may well obviate the need to resolve a
significant federal constitutional question.
Barr v. Galvin, 626 F.3d 99, 107 (1st Cir.2010).
Defendants argue that the first requirement for
abstention is met because no Massachusetts court
has interpreted MassDOT's rulemaking authority
under the 2009 Transportation Act and this
decision is best left to the state courts. They
contend that the second prong is also satisfied
because resolution of the state law question in
plaintiffs' favor would eliminate the need for the
Court to reach the First Amendment issue.
The United States Supreme Court has held that
where a federal court can certify a potentially
dispositive question of state law to the highest
court of the state in question, it should do so rather
than dismiss or stay a federal claim on abstention
grounds. See Arizonans for Official English v.
Arizona, 520 U.S. 43, 75–77, 117 S.Ct. 1055, 137
L.Ed.2d 170 (1997) ; Virginia v. American
Booksellers Ass'n, Inc., 484 U.S. 383, 396, 108
S.Ct. 636, 98 L.Ed.2d 782 (1988).
In light of this Court's decision to certify the
question regarding the scope of MassDOT's
authority under the 2009 Transportation Act which
may be dispositive of the plaintiffs' First
Amendment claim, defendants' motion to dismiss
Count III will be denied without prejudice.
ORDER
For the foregoing reasons,
1) the defendants' renewed motion to
dismiss (Docket No. 63) is DENIED
WITHOUT PREJUDICE;
5
OA VW LLC v. Massachusetts Department of Transportation 76 F. Supp. 3d 374 (D. Mass. 2015)
2) the following question of state law is
CERTIFIED to the Massachusetts
Supreme Judicial Court pursuant to
Supreme Judicial Court Rule 1:03 :
Does the 2009 Transportation Act, codified
at M.G.L. c. 6C, empower the
Massachusetts Department of
Transportation to regulate outdoor
advertising throughout the Commonwealth
or only with respect to the implementation
of restrictions imposed by the Federal
Highway Beautification Act of 1965,
codified at 23 U.S.C. § 131(a) ?
A statement of the facts relevant to the
question certified and describing the nature
of the controversy in which the question
arose is set forth in the attached
Memorandum;
3) the Clerk of the Court is directed to
forward to the Massachusetts Supreme
Judicial Court, under official seal, copies
of this Memorandum and Order and the
entire record of this case; and
4) pending a response to the certified
question from the Massachusetts Supreme
Judicial Court, this case is hereby
STAYED.
So ordered.
6
OA VW LLC v. Massachusetts Department of Transportation 76 F. Supp. 3d 374 (D. Mass. 2015)