Opinion
Civil No. 02-1060 (DWF/AJB)
January 10, 2003
David K. Nightingale, Esq., and Marvin A. Liszt, Esq., Bernick Lifson, Minneapolis, Minnesota, counsel for Plaintiff.
Eric D. Larson, Saint Paul City Attorney, Saint Paul, Minnesota, counsel for Defendant.
MEMORANDUM OPINION AND ORDER
INTRODUCTION
The above-entitled matter came on for hearing before the undersigned United States District Judge on December 13, 2002, pursuant to Defendant's Motion for Summary Judgment. In its Complaint, Plaintiff asserts four causes of action: denial of due process under the Constitution of the State of Minnesota; denial of due process and equal protection under the Constitution of the State of Minnesota; First Amendment violations under the United States Constitution; and denial of equal protection under the United States Constitution. For the reasons set forth below, Defendants' motion for summary judgment is denied.
Background
This case centers around the question of whether the City of St. Paul's $145 per billboard annual inspection fee violates provisions of the Minnesota and United States Constitutions.
Plaintiff Clear Channel, Inc., frequently known as Eller Media Company ("Clear Channel") is a Delaware corporation that owns and operates approximately 390 outdoor sign structures, constituting 460 advertising faces, in the City of Saint Paul. In March 2002, the City of Saint Paul (the "City") directed Clear Channel to pay a $145 fee for each sign face that Clear Channel owned, totaling $68,875. The City charged this fee to Clear Channel based upon the City of Saint Paul Legislative Code (the "Code") regulations that govern sign structures. Such Code provisions are contained in Chapter 66 of the Code. The stated purposes of these regulations are as follows:
(1) To promote the public health, safety and general welfare of the community;
(2) To encourage a concern for the visual environment which makes the city a more desirable place to live, work and visit;
(3) To identify and promote business and industry in the city;
(4) To reduce hazards which may be caused by signs projecting over public rights-of-way;
(5) To protect open space and areas characterized by unique environmental, historical and architectural resources;
(6) To protect the right of information transmittal;
(7) Along advanced speed arteries, to promote the safety, convenience and enjoyment of public travel, to protect the public investment in highway beautification, and to preserve and enhance the natural scenic beauty or the aesthetic features of roadways in scenic and adjacent areas;
(8) To reduce the number of nonconforming signs in the city, particularly billboards;
(9) To control the quality of materials, construction, electrification and maintenance of all signs.
Code § 66.101.
The Code defines "sign" as the "use of words, numerals, figures, devices, designs or trademarks the purpose of which is to show or advertise a person, firm, profession, business, product or message." Code § 66.121.S. The Code distinguishes between "Advertising Signs" and "Business Signs." An Advertising Sign is a "sign which directs attention to a business, profession, commodity, service, or entertainment which is conducted, sold or manufactured elsewhere than on the premises upon which the sign is placed." Code § 66.103.A (emphasis supplied). A Billboard is a form of an advertising sign that is larger than fifty square feet. Code §§ 66.103.A, 66.104.B. There are approximately 620 billboards in the City.
A Business Sign is defined as "a sign which directs attention to a business, profession, commodity, service or entertainment which is conducted, offered, sold or manufactured on the premises upon which the sign is placed." Code § 66.104.B (emphasis supplied). There are approximately 16,000 business signs in the City, but it is unclear how many of these business signs are greater than 50 square feet.
In November 2000, the Saint Paul City Council passed Ordinance #00-973, establishing the Billboard Inventory, Fee, and Enforcement Program. The Code defines the program as follows:
(f) Billboard inventory and enforcement. The zoning administrator shall maintain an inventory of billboards in the city. The zoning administrator shall from time to time perform inspections of all billboards in the city and maintain records, which may include photographs, of all billboards. If the zoning administrator determines that the opinion of a structural engineer or other experts are needed, the zoning administrator may hire a consultant. A billboard owner must provide access for inspectors promptly; such access may involve getting to a rooftop through a lessor's building or providing a cherry picker.
(g) Billboard fees. The City shall collect annual billboard fees from their owners. Said fee shall be set by the city council by resolution upon recommendation from the zoning administrator on what amount is adequate to cover the city's costs for staff and contracted services to maintain the billboard inventory and strictly enforce all city regulations for billboards. The fee may be adjusted from year to year to reflect changes in the city's costs.
Code § 66.402(f)-(g).
Pursuant to these sections, the City zoning administrator evaluated the costs for staff and contracting services to enforce billboard regulations and thus to maintain the City's billboards. Based upon recommendations from the zoning administrator and the Office of License Inspections and Environmental Protection, the City Council adopted Resolution #01-461 on May 9, 2001, authorizing a City-imposed fee of $145 for each sign face per year to implement the Billboard inventory and enforcement program as mandated by Code § 66.402(f).
Because the inventory and enforcement program only applies to billboards, by definition it only applies to signs greater than fifty square feet which advertise for a service or commodity, among other things, that occurs elsewhere than on the premises where the sign is located. See Code §§ 66.103.A, 66.104.B. A company that owns a sign that is greater than fifty square feet and advertises for a service or commodity, among other things, that occurs on the premises where the sign is located is not subject to the inventory and enforcement program and thus does not pay the $145 annual fee for inspection.
Plaintiff asserts that the billboard inspection fee program is unconstitutional on a variety of grounds. Plaintiff contends that the fee program violates equal protection and due process under the Minnesota Constitution and that it violates equal protection and free speech under the First and Fourteenth Amendments of the United States Constitution.
In its motion for summary judgment, the City asserts that Plaintiff's action should be dismissed because Plaintiff failed to escrow the disputed fee amount prior to commencing this action. In addition, the City argues that Plaintiff's action should be dismissed on the merits on all counts. Specifically, the City asserts that the ordinance is a valid exercise of the City's power under both the Minnesota and United States Constitutions.
Discussion
1. Standard of Review
Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The court must view the evidence and the inferences which may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enterprise Bank v. Magna Bank of Missouri, 92 F.3d 743, 747 (8th Cir. 1996). However, as the Supreme Court has stated, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy, and inexpensive determination of every action.'" Fed.R.Civ.P. 1; Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enterprise Bank, 92 F.3d at 747. The nonmoving party must demonstrate the existence of specific facts in the record which create a genuine issue for trial. Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Krenik, 47 F.3d at 957.
2. The Escrow
The City asserts that aside from the merits of its claims, Plaintiff failed to deposit the disputed fee into escrow with the City at the time that Plaintiff raised the lawsuit, pursuant to Minn. Stat. § 462.353, subdivision 4, and that such failure precludes Plaintiff's action. The statute reads:
A municipality may prescribe fees sufficient to defray the costs incurred by it in reviewing, investigating, and administering an application for an amendment to an official control established pursuant to sections 462.351 to 462.364 or an application for a permit or other approval required under an official control established pursuant to those sections. Fees as prescribed must be by ordinance and must be fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed. A municipality shall adopt management and accounting procedures to ensure that fees are maintained and used only for the purpose for which they are collected.
If a dispute arises over a specific fee imposed by a municipality related to a specific application, the amount of the fee must be deposited and held in escrow, and the person aggrieved by the fee may appeal under 462.361. An approved application may proceed as if the fee had been paid, pending a decision on the appeal.
Minn. Stat. § 462.353, subd. 4 (2002). Plaintiff contends that this statute does not apply because the billboard inspection fee is not a fee paid "to defray the costs incurred by [the City] in reviewing, investigating, and administering an application for an amendment to an official control established pursuant to sections 462.351 to 462.364" nor is it a fee paid to defray the costs of "reviewing, investigating, and administrating an . . . application for a permit or other approval required under an official control established pursuant to those sections." Id. In addition, Plaintiff asserts, and the City does not dispute, that Plaintiff paid the fee while still reserving its rights to challenge its constitutionality.
The Court finds Plaintiff's arguments persuasive. First, for the reasons stated by Plaintiff, it is not clear to the Court that the statute applies to the billboard inspection fee. In no way does the disputed billboard inspection fee relate to an "application" as required by the statute. See Minn. Stat. § 462.353, subd. 4.
In addition, even if the statute were to apply to the billboard inspection fee, it appears to be undisputed that Plaintiff paid the fee in question. The statute states that the fee "must be deposited" and held in escrow. Id. The Court interprets this to mean that first, the party challenging the fee must deposit the disputed amount. Second, it is the duty of the City, not the party disputing the fee, to ensure that such fee is deposited into escrow while the fee is still in dispute. The City's failure to escrow the disputed fee should not prevent Plaintiff from commencing an action, because once the Plaintiff deposited the fee, it was essentially out of Plaintiff's control as to how the City would manage the disputed fee. Thus, the City's motion for summary judgment on this issue is denied.
3. Constitutionality of the Billboard Inspection Fee
Aside from the escrow issue, the City asserts that summary judgment should be granted in its favor, as the billboard inspection fee does not contravene either the Constitution of the State of Minnesota or the United States Constitution. As a matter of law, the Court is not willing to grant summary judgment in favor of the City on any count.
In so holding, the Court finds particularly persuasive the Supreme Court decision in Metromedia, Inc. v. City of San Diego and another billboard case directly on point from the United States District Court, Central District of California. See Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (1981); Clear Channel Outdoor, Inc., v. City of Los Angeles, ___ F. Supp.2d ___, 2002 WL 31554108 (C.D.Cal. 2002). Without engaging in an extensive analysis of these two cases, the Court concludes that under those decisions, the constitutionality of the City's billboard inspection fee is in question.
In Metromedia, the Supreme Court addressed whether a billboard ordinance that restricted certain kinds of noncommercial messages, but allowed other commercial messages, was constitutional. The Supreme Court held that a "city may not conclude that the communication of commercial information concerning goods and services connected with a particular site is of greater value than the communication of noncommercial messages." Metromedia, 453 U.S. at 513. It appears to the Court that this is exactly the distinction that the City is making with the billboard inspection fee. Specifically, the City charges a $145 fee for all billboards that advertise for a service or commodity that is located off the premises from which the sign is located. This fee appears to apply to both commercial and noncommercial messages. As to signs that advertise for services or commodities that occur on the premises for which the sign is located, however, the City does not charge a fee. Thus, signs greater than fifty square feet that contain noncommercial messages regarding services or commodities that occur off the premises are charged a fee, but signs greater than fifty square feet that contain commercial messages regarding services or commodities that occur on the premises are not charged a fee. Under Metromedia, this distinction is constitutionally questionable.
At oral argument on this matter, the City asserted that advertising signs greater than fifty square feet that display noncommercial messages are somehow exempt from the inspection fee. The City appears to contend that signs with a noncommercial message are not "advertising signs" pursuant to Code § 66.103.A. Thus, the City suggests that the law does not make any distinction between commercial and noncommercial messages. The Court finds no support in the record for these assertions. Notably, Plaintiff has asserted that it was indeed charged a $145 billboard inspection fee for a sign that advertised for an off-premises, noncommercial service (notably, the message "Buckle Up!"). If the City is evaluating these signs on a case-by-case basis, other Constitutional concerns of standardless discretion may be at issue.
In Clear Channel Outdoor, Inc. v. City of Los Angeles, the U.S. District Court for the Central District of California addressed a set of facts nearly identical to those at issue here in the context of a motion for a preliminary injunction. In that case, the Court held that when an ordinance makes content-based restrictions on non-commercial speech such as those made in the ordinance at issue here, the City "has the heavy burden of proving that the regulation is narrowly tailored to serve a compelling government interest." See Clear Channel Outdoor, Inc. v. City of Los Angeles, ___ F. Supp.2d ___, 2002 WL 31554108 at *4, citing Arkansas Writers' Project, Inc. v. Ragland, 481 U.S. 221, 231 (1987). Relying upon Metromedia, that court found that the ordinance raised serious constitutional concerns. Id. at *8.
In line with that court's holding, this Court is not convinced that the City of Saint Paul has met its heavy burden as a matter of law. For example, the City has not proven that it has a compelling safety or aesthetic interest in regulating only some, but not all, signs with an area greater than fifty square feet. In addition, the City has not provided a sufficient justification for its burden on noncommercial messages; nor has the City provided a justification for the unequal treatment of commercial and noncommercial speech under the ordinance. Thus, summary judgment in favor of the City at this stage of the litigation is inappropriate.
For the reasons stated, IT IS HEREBY ORDERED:
1. Defendants' Motion for Summary Judgment (Doc. No. 9) is DENIED.