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Media Alerts - Contest Promotions, LLC v. City and County of San Francisco
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October 26, 2017
  Contest Promotions, LLC v. City and County of San Francisco
Headline: Ninth Circuit panel holds Article 6 of San Francisco's Planning Code distinguishing commercial and noncommercial signs and exempting noncommercial signs from regulation does not violate the First Amendment.

Areas of Law: Constitutional Law; First Amendment; Commercial Speech

Issue Presented: Whether Article 6 of San Francisco's Planning Code violates the First Amendment by distinguishing between commercial signs and noncommercial signs, and exempting noncommercial signs from the rule's scope?

Brief Summary: The Ninth Circuit panel affirmed the district court's dismissal of an action brought under 42 U.S.C. ยง 1983. Plaintiff-Appellant Contest Promotions, LLC, a business engaged in outdoor commercial advertising, challenged the constitutionality of Article 6 of San Francisco's Planning Code because it exempted noncommercial signs. The Ninth Circuit panel rejected Appellant's argument for a greater level of scrutiny than intermediate scrutiny. It then applied the four-step analysis announced by the United States Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission to hold Article 6 survived intermediate scrutiny.

Significance: The Ninth Circuit panel held Article 6 did not violate the First Amendment by distinguishing between commercial and noncommercial signs, and by exempting noncommercial signs from regulation.

Extended Summary: Plaintiff-Appellant, Contest Promotions, LLC, ("Appellant") is engaged in the business of renting advertising space from businesses in cities. The advertising is done by placing third-party advertising signs that prompt persons to enter the business and win a prize related to the sign. Defendant-Appellee City and County of San Francisco ("the City") controls outdoor advertising through Article 6 of San Francisco's Planning Code ("Article 6"). Article 6 regulates outdoor advertising for several reasons, including promoting aesthetic and environmental values, protecting public investment in and the character and dignity of public buildings, streets, and open spaces, protecting the distinctive appearance of the city, and reducing hazards to motorists, bicyclists, and pedestrians.

The Planning Code distinguishes between "general advertising signs" and "business signs." A general advertising sign directs attention to a business, commodity, industry or other activity which is sold, offered or conducted elsewhere than on the premises upon which the sign is located, while a business sign relates to similar activity conducted on the premises. It exempts noncommercial signs which are defined in Article 6 by a non-exhaustive list. These include governmental signs, official public notices, temporary display posters, and flags. No other definition is provided in the Planning Code regarding noncommercial signs.

There is no dispute that Appellant's signs are "commercial" pursuant to Article 6. Appellant sued the San Francisco, alleging that the Code section violates the First Amendment by exempting noncommercial signs from it regulatory ambit. The district court granted the City's motion to dismiss, and this appeal followed.

The Ninth Circuit panel first determined the level of scrutiny that applies to Article 6. While Appellant argued for a higher standard of scrutiny than intermediate scrutiny, citing Sorrell v. IMS Health Inc., 564 U.S. 442 (2011), the panel rejected Appellant's argument and held that Sorell did not mark a fundamental departure from the four-step test announced Central Hudson Gas & Electric v. Public Service Commission, 447 U.S. 557 (1980).

Next, the Ninth Circuit panel undertook an analysis of Article 6 in light of the Central Hudson four-step test. The first step is whether the speech concerns lawful activity and is not misleading. The court concluded Appellant's advertisements were lawful and not misleading. The second step is whether the asserted governmental interest is substantial. The panel found that the City's interests in safety and aesthetics are substantial.

If the first two parts of the standard yield positive answers, Central Hudson directs that a court make two additional inquiries. The third, step is whether the regulation directly advances the governmental interest asserted. The fourth step is to guard against over-regulation rather than under-regulation.

Appellant argued that Article 6 was unconstitutional because it failed the last two steps of the Central Hudson analysis. It argued Article 6 is more extensive than necessary to serve the City's interest because it exempts noncommercial signs for purposes which are too tenuous to Appellee's claimed interests in "safety and aesthetics." Appellant cited City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410 (1993) as authority. However, the Ninth Circuit panel distinguished Discovery Network from the case at bar. In Discovery Network, the challenged city ordinance completely prohibited the distribution of commercial handbills using newsracks in public places while there was no prohibition on distributing noncommercial handbills in the same way. The record showed the number of newsracks dispensing commercial handbills was "minute" compared with the total number. The Supreme Court held that the ordinance's distinction between commercial and noncommercial speech had no relationship whatsoever to the city's legitimate interest in safety and aesthetics.

In the instant case, the Ninth Circuit panel determined Article 6 is not constitutionally underinclusive. The text of Article 6 expresses that it is intended to address the problems of the increased size and number of general advertising signs that contributed to blight and clutter and the commercialization of public spaces. The panel found that the legislative purpose to regulate specific commercial signs has a substantial effect on its interest in safety and aesthetics.

The also Ninth Circuit panel rejected Appellant's claim that Article 6 inappropriately discriminated against commercial speech based on the ground that commercial speech deserves less protection that noncommercial speech. The court recognized that the purpose of Article 6 is to address the unique risks to the city's interests that commercial signs pose.

Lastly, the Ninth Circuit panel held a law need not fit perfectly and completely with an identified problem to survive intermediate scrutiny. It found that the distinctions drawn between commercial and noncommercial speech directly advance the city's substantial interests. Thus, the Ninth Circuit panel concluded Article 6 survived intermediate scrutiny and affirmed the district court's dismissal of Appellant's claims

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...17/08/16/17-15909.pdf

Panel: Susan P. Graber and Michelle T. Friedland, Circuit Judges, and Consuelo B. Marshall, District Judge.

Argument Date: July 12, 2017

Date of Issued Opinion: August 16, 2017

Docket Number: 17-15909

Decided: Affirmed

Counsel: Michael F. Wright (argued), Los Angeles, California, for Plaintiff-Appellant.
James M. Emery (argued) and Victoria Wong, Deputy City Attorneys; Dennis J. Herrera, City Attorney; Office of the City Attorney, San Francisco, California; for Defendant-Appellee.

Author of Opinion: Circuit Judge Graber

Circuit: Ninth

Case Alert Author: Erik Wu

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/26/2017 04:35 PM     9th Circuit  

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