A billboard company has won the latest round in a drawn-out conflict with the City of Riverside. The Ninth U.S. Circuit Court of Appeals has ruled that Valley Outdoor Inc. may challenge the city’s handling of a permit application but may not contest the city’s sign ordinance.
With its ruling, the Ninth Circuit sent the case back to federal district court for additional proceedings.
In January 2000, Valley Outdoor began pouring foundations for five billboards next to the 91 Freeway in Riverside without permits. Two days after pouring foundations, Valley Outdoor sued the city, arguing that the city’s sign ordinance violated the company’s First Amendment rights. A few days after that, a state appellate court in an unpublished opinion struck down sections of the city’s ordinance, specifically a ban on billboards located within 750 feet of a freeway and a content-based exception to that ban (City of Riverside v. Outdoor Media Group, Inc., No. E022351).
Valley Outdoor President J. Keith Stephens then attempted to file a permit application, but he was told the city still would not permit billboards within 750 feet of a freeway and he was turned away. In late February 2000, after the company had completed construction of all five billboards, Valley Outdoor again tried to apply for a permit. This time the city accepted the application. While it was pending, the city adopted a revised ordinance that restored the 750-foot freeway exclusion zone and prohibited offsite signage.
In a letter dated one day before the effective date of the new ordinance, the city notified the billboard company that the city was rejecting the permit application because Valley Outdoor had not precisely identified the color and materials used for the sign uprights, and because the company failed to provide specific street addresses for two sign locations. Shortly thereafter, the city ordered Valley Outdoor to remove the billboards.
Valley Outdoor amended its lawsuit, and in 2002 the district court ruled that the five billboards were governed only by those sections of the original sign ordinance left standing after the Outdoor Media Group decision. In 2003, District Court Judge Dickran Tevrizian ruled that because Valley Outdoor had violated the city’s permit provisions by starting construction without applying for a permit, the company had no standing to challenge the billboard ordinance. Judge Tevrizian then granted the city’s motion for judgment as a matter of law.
On appeal, the Ninth Circuit dealt only with the issue of whether Valley Outdoor has standing to bring the lawsuit. The court ruled that the company could not challenge the city’s regulations themselves. The original billboard ordinance “is irrelevant because its substantive restrictions were invalidated by Outdoor Media Group,” Judge Diarmuid O’Scannlain wrote for the court. And the amended ordinance does not apply because Valley Outdoor installed its billboards before the law’s effective date.
However, the Ninth Circuit ruled that the billboard company could contest its treatment by the city. The court noted “that the city’s billboard ordinance contains a detailed procedure by which the city will process an application filed after the beginning of construction, i.e. a ‘latefiled’ permit application.”
“Valley’s commencing construction before applying for the required permits does not constitute disqualifying ‘selfhelp,’ as the district court concluded, but actually gives rise to this very case or controversy,” O’Scannlain wrote. “Thus the district court erred in ruling that Valley lacked standing to assert constitutional claims related to the city’s conduct in refusing to process the latefiled permit applications.”
The Ninth Circuit further ruled that the district court should have considered evidence regarding the city’s actions. “A jury could find that any differential treatment of Valley’s latefiled application may have been irrational and wholly arbitrary, in violation of equal protection principles,” the Ninth Circuit ruled.
In a concurring opinion, Federal Circuit Court Senior Judge Daniel Friedman, sitting by designation, wrote that he disagreed with “some of the court’s statements” but that he agreed with the result. “I hope that evidence would be developed addressing these items: (1) Valley’s reasons, if any, for not seeking a permit before beginning construction of the billboards (other than its claim that such application would have been futile); and (2) the city’s reasons for apparently not considering the merits of Valley’s retroactive request for a permit or for denying that request (other than the city’s apparent position that it has absolute discretion to grant or deny a permit without stating a reason),” Friedman wrote.
The Case:
Valley Outdoor, Inc. v. City of Riverside, No. 04-55029, 06 C.D.O.S. 3485, 2006 DJDAR 5036. Filed April 27, 2006.
The Lawyers:
For Valley Outdoor: Eliot Disner, Van Etten, Suzumoto & Becket, (310) 315-8200.
For the city: Timothy Coates, Greines, Martin, Stein & Richland, (310) 859-7811.
