Fed Advertising v. City of Chicago

Citation: Not availableDocket: 02-1909

Court: Court of Appeals for the Seventh Circuit; April 25, 2003; Federal Appellate Court

Original Court Document: View Document

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The United States Court of Appeals for the Seventh Circuit addresses the case of Federation of Advertising Industry Representatives, Inc. v. City of Chicago, concerning a now-repealed ordinance that restricted alcohol and cigarette advertising in publicly visible locations. The district court determined that the repeal of the ordinance rendered the case moot and denied the plaintiff's request for attorney’s fees. The ordinance, enacted in September 1997, prohibited such advertisements but included exceptions for commercial and manufacturing zones, as well as a grandfather clause for existing contracts. The grandfather clause was later removed when the City discovered advertisers were exploiting it to enter new contracts.

The Federation, representing companies in advertising, alleged violations of the First Amendment and claimed the ordinance was preempted by federal and state laws. Initially, the district court granted summary judgment on the preemption claim, ruling that the ordinance's provisions on cigarette advertising were preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA), but deferred its decision on the First Amendment claim. The court awarded the Federation declaratory and injunctive relief while denying damages due to a lack of evidence.

The City appealed the summary judgment and attorney’s fees awarded to the Federation. In a prior appeal, the Seventh Circuit reversed the total preemption ruling, finding that only a specific exception allowing generic tobacco advertising was preempted, which was severable from the rest of the ordinance. The court affirmed the validity of the ordinance minus the preempted section. Subsequently, the City amended the ordinance in 2000 to eliminate the preempted exception and other questionable provisions.

Federation amended its complaint to remove the preemption claim and the challenge to the cigarette advertising provisions of the ordinance. On June 5, 2001, it sought summary judgment, asserting that the ordinance's regulation of alcohol advertising constituted an invalid content-based regulation of noncommercial speech, or alternatively, an invalid restriction on commercial speech. Following the Supreme Court's decision in Lorillard Tobacco Co. v. Reilly, which invalidated a similar Massachusetts statute, Federation argued that this ruling necessitated granting its summary judgment motion. The City, however, did not contest the merits of this motion but instead filed a cross-motion to dismiss on September 13, 2001, claiming mootness due to its intention to repeal the ordinance. The City maintained that it did not concede the ordinance's unconstitutionality but chose to repeal it to avoid risks highlighted by Lorillard. The ordinance was repealed on October 31, 2001, and the district court subsequently dismissed the case as moot. Federation then sought rehearing, claiming to be a 'prevailing party' entitled to attorney's fees under 42 U.S.C. § 1988. The district court denied this motion, reaffirming mootness and stating that Federation did not qualify as a 'prevailing party' as defined by Supreme Court precedent. Federation appeals both the mootness decision and the denial of attorney’s fees.

The analysis of mootness is reviewed de novo, with cases lacking 'actual, ongoing controversies' dismissed for lack of jurisdiction. Although a plaintiff's claim for damages can prevent a case from becoming moot, Federation's damage claim was denied by the district court and was not appealed, thus precluding it from reviving that claim. The court ruled that Federation could only pursue injunctive and declaratory relief. Federation contended that the case involved a live controversy because the City could reenact the ordinance. However, the principle that a defendant's voluntary cessation does not moot a case applies only if a claim for damages remains, which was not the case here.

The document asserts that while the standard for private party disputes typically does not favor voluntary cessation by government officials, a different approach is taken when public officials are involved. Courts are generally more lenient towards genuine self-corrections by government entities, viewing the complete repeal of a challenged law as sufficient to moot a case, unless there is credible evidence suggesting that the government intends to reenact the law. The City of Chicago's repeal of an ordinance is scrutinized to determine if it was disingenuous or if there exists a reasonable expectation of its reenactment. 

The Federation argues that the City’s history of amending and ultimately repealing the ordinance indicates bad faith, suggesting a strategy to evade constitutional scrutiny. However, the court finds that these actions reflect the City’s good-faith attempts to create a constitutionally compliant ordinance and to avoid litigation costs, particularly in light of judicial precedents that prompted the repeal. 

Additionally, the Federation points to a new, different ordinance proposal as evidence of the City’s potential return to restrictive practices. However, the proposed ordinance differs significantly, as it would create sign-free districts without content-specific regulations. The court emphasizes that the introduction of a substantially different law does not suggest a likelihood of the old ordinance being reinstated, and the uncertainty surrounding the enactment of the proposed law further weakens the Federation’s argument. Overall, the court does not find sufficient grounds to conclude that the City is likely to reenact the previous ordinance.

The case is deemed moot because the City has repealed the challenged ordinance and there is no reasonable expectation that it will be reenacted, differing from precedents where similar laws were reinstated. The district court's ruling is affirmed. Regarding attorney's fees under 42 U.S.C. § 1988, the Federation's claim was denied because it was not considered a 'prevailing party.' The court clarified that a prevailing party must achieve a judicially sanctioned change in the legal relationship, which the Federation did not obtain. The Supreme Court's decision in Buckhannon ruled out the 'catalyst theory' for awarding fees, emphasizing that only enforceable judgments or consent decrees qualify. Although there were moments when the district court granted favorable rulings, these were later reversed or did not provide the broad relief sought by the Federation. The City’s repeal of the ordinance was not deemed voluntary, and even if the Supreme Court's Lorillard decision influenced the repeal, it did not create a judicial change in this case. The failure to expedite the summary judgment motion does not alter this outcome. Thus, the court affirms the denial of attorney’s fees to the Federation.