Dennis Ballen Nice Tie Inc., a Washington Corporation Dba Blazing Bagels v. City of Redmond, a Municipal Corporation City of Redmond Planning and Community Development Department Roberta Lewandowski, in Her Official Capacity as Planning Director of the City of Redmond Dept of Planning and Community Development, Dennis Ballen Nice Tie Inc., a Washington Corporation Dba Blazing Bagels v. City of Redmond, a Municipal Corporation City of Redmond Planning and Community Development Department Roberta Lewandowski, in Her Official Capacity as Planning Director of the City of Redmond Dept of Planning and Community Development
Docket: 04-35606
Court: Court of Appeals for the Ninth Circuit; September 15, 2006; Federal Appellate Court
A First Amendment commercial speech case involves a dispute between Blazing Bagels, operated by Dennis Ballen, and the City of Redmond regarding the city's commercial signage ordinance. The City of Redmond and its Planning and Community Development Department are appealing a district court's summary judgment and attorneys' fees awarded to Ballen. The ordinance in question, RCDG 20D.160.10-090, bans most portable signs with specific exceptions aimed at promoting traffic safety and aesthetics. Ballen argues that the ordinance does not effectively advance the government's interests and imposes unnecessarily broad restrictions on commercial speech. The district court found the ordinance invalid, a ruling that is affirmed by the appellate court, along with the fee award. The ordinance allows ten exceptions, including signs for real estate and political purposes, but prohibits portable signs like sandwich boards and readerboards. Between late 2002 and mid-2003, Ballen employed a sign-wearing individual to promote his business, leading the City to notify him of a violation and potential code enforcement action for noncompliance.
Ballen was ordered to cease using a portable sign for business advertising. In response, he filed a Complaint in King County Superior Court under 42 U.S.C. 1983 and Washington's Declaratory Judgments Act, which was later removed to the U.S. District Court for the Western District of Washington. Cross-Motions for Summary Judgment were submitted by both parties, resulting in a June 15, 2004, district court ruling that granted Ballen's motion and denied the City's motion. Following this, Ballen sought attorneys' fees and costs, which the court awarded despite the City's opposition, totaling $165,508.
The summary judgment grant is reviewed de novo, requiring an assessment of whether there are genuine issues of material fact and if the law was correctly applied. Both parties agreed to resolve the case through summary judgment, as no material facts were disputed.
Subsequently, on December 6, 2005, the City enacted a new sign ordinance that repealed the previous ban, yet the case remained active due to Ballen's pursuit of nominal damages and attorneys' fees, which the new ordinance did not eliminate. The City acknowledged that the new ordinance was a temporary measure in response to the court's ruling, maintaining the case's relevance.
The excerpt outlines the definition of commercial speech, which pertains to economic interests, affirming that Ballen's sign constituted such speech. Commercial speech is afforded limited First Amendment protection. The Supreme Court's Central Hudson test for governmental restrictions on commercial speech is established, requiring an evaluation of four factors: the protection of the speech under the First Amendment, the substantiality of the governmental interest, whether the regulation advances that interest, and whether it is not overly broad. The first two criteria were agreed upon by both parties, confirming that Ballen's sign conveyed lawful and non-misleading content while the City’s interests in safety and aesthetics were deemed substantial.
The ordinance in question aims to promote traffic safety and enhance the city's appearance, which are recognized as significant governmental interests. The constitutionality of Redmond's Ordinance hinges on the third and fourth prongs of the Central Hudson test, with the fourth prong being particularly critical. This prong assesses whether the regulation is more extensive than necessary to achieve its governmental interest, requiring a reasonable relationship between the restriction and its objectives. The City bears the burden of proving that the Ordinance is narrowly tailored.
The precedent set by the City of Cincinnati v. Discovery Network illustrates the application of this principle; Cincinnati's ban on commercial news racks was struck down because it did not demonstrate that prohibited racks were any more harmful than allowed ones. The Court found that Cincinnati’s differentiation lacked a rational connection to the asserted governmental interests and that the content-based nature of the ban suggested a failure to adequately consider the implications on free speech.
In the case of Redmond's Ordinance, the exemptions granted are also content-based, treating different signs differently based solely on their content. The City has not substantiated how the exempt signs contribute to safety or aesthetics any more effectively than the banned signs. This lack of justification mirrors Cincinnati’s errors, indicating a failure to properly assess the costs and benefits of the Ordinance’s speech restrictions. While some content-based exceptions in the Ordinance may be reasonable, others undermine the City’s stated objectives.
Ubiquitous real estate signs pose a greater threat to vehicular and pedestrian safety and community aesthetics compared to a single employee holding a simple sign. A municipal ordinance that restricts such signage unfairly impinges on the First Amendment rights of business owners, like a bagel shop owner. The City has prioritized outdoor signage for the real estate industry over broader commercial speech rights. Temporary window signs and kiosk signs also present similar safety and aesthetic concerns. The existence of less restrictive alternatives, such as time, place, and manner regulations for all commercial signs, must be considered in assessing the ordinance's validity under the Central Hudson test. Previous rulings, such as in *Discovery Network* and *Rubin*, highlight that if alternative methods exist to achieve the City's interests without infringing on First Amendment rights, the ordinance may be deemed overreaching. The case of *Metromedia* is not directly applicable as it pertains specifically to fixed billboards, which are more intrusive than movable signs, thus necessitating a different legal analysis.
The ordinance upheld in Metromedia prohibited all offsite commercial advertising, while the current Ordinance allows several exemptions for commercial advertising. In Metromedia, the distinction was between onsite and offsite billboards, characterized as content-neutral. The Redmond Ordinance’s inconsistent content-based distinctions and the existence of less restrictive alternatives fail to meet the requirements of Central Hudson’s fourth prong, indicating a lack of reasonable fit between the restrictions and the goals.
The City contends that the district court incorrectly excluded statements from Redmond Code Enforcement Officer Deborah Farris. Evidentiary rulings during summary judgment are reviewed for abuse of discretion, and a ruling can only be reversed if it is manifestly erroneous and prejudicial. Under Washington law, ultimate facts and conclusory statements are insufficient for summary judgment. Officer Farris claimed the ban on portable signs advances traffic safety and aesthetics, noting a significant decrease in such signs. However, these assertions lacked objective factual support and were rightfully excluded by the district court, which determined that the exclusion did not prejudice the City.
The City also argues that if the ban is deemed unconstitutional due to exemptions, those exemptions should be severed. However, severance would expose exempted activities to legal penalties and infringe upon protected speech, making exempt individuals essential to the case. Therefore, the district court appropriately declined to sever these parts of the Ordinance.
Lastly, the City challenges the award of attorneys' fees under 42 U.S.C. § 1988, which is reviewed for abuse of discretion, occurring if the district court applies an incorrect legal standard or relies on clearly erroneous factual findings.
In the case of **United States v. Alisal Water Corp.**, the court addressed the awarding of attorney's fees under 42 U.S.C. § 1988, stating that a prevailing party, other than the United States, is entitled to reasonable attorney's fees unless special circumstances make such an award unjust. The court affirmed that Ballen was the prevailing party entitled to attorney's fees, as no special circumstances justified a denial of these fees.
The City contended that the district court's award of $165,508 in attorney's fees was excessive. The Ninth Circuit employs the "lodestar" method for calculating reasonable attorney's fees, which involves multiplying the hours reasonably spent on the litigation by a reasonable hourly rate, followed by a potential adjustment based on twelve specified factors. The City argued that the short duration of the proceedings, minimal discovery, and limited court appearances indicated that Ballen's counsel's hours were inflated. However, the court noted that adjustments to the lodestar figure should be rare, emphasizing that the district court has the discretion to modify awards for excessive efforts not warranted by the case.
Ultimately, the court found no abuse of discretion in the district court's award of attorney's fees to Ballen, affirming both the summary judgment and the fee award. Additionally, Redmond's Ordinance was deemed to violate commercial speech rights under the Central Hudson test, further affirming the district court's decision in favor of Ballen.
Two appeals have been consolidated in this case. In Metromedia, the Supreme Court upheld a San Diego ordinance banning outdoor, offsite commercial billboards as a valid restriction on commercial speech, emphasizing the ordinance's alignment with city interests in traffic safety and community aesthetics and its narrow tailoring under Central Hudson's four-part test. However, applying Metromedia as precedent in the current case is problematic. The Metromedia Court noted that different communication methods require distinct legal considerations, specifically highlighting the fixed, intrusive nature of billboards compared to portable sandwich boards. Billboards contribute to visual pollution, while portable signs can be easily removed.
Additionally, the Metromedia ordinance banned all offsite commercial advertising, creating a content-neutral distinction between onsite and offsite billboards. In contrast, the current ordinance exempts various categories of commercial advertising, indicating a content-based distinction that undermines its validity under Central Hudson’s fourth prong. The ordinance fails to demonstrate a reasonable fit between its restrictions and the city's goals, leading to its invalidation.
Furthermore, the City contends that the district court incorrectly excluded statements from Redmond Code Enforcement Officer Deborah Farris. Evidentiary rulings during summary judgment are reviewed for abuse of discretion, requiring a ruling to be manifestly erroneous and prejudicial for reversal. Under Washington law, only admissible evidence can be considered in summary judgment. Farris's statements, while asserting that the ban on portable signs advances traffic safety and aesthetics, lack the necessary factual basis and personal knowledge required for admissibility, as established by Washington Supreme Court precedent.
The district court found that the City's ban on portable signage significantly impacts the total signage in Redmond, representing a majority if not an outright majority of potential signs. The court excluded Officer Farris's statements due to a lack of objective facts supporting his legal conclusions, determining that their exclusion was not prejudicial to the City as they did not remedy deficiencies regarding the Ordinance's constitutionality under Central Hudson's fourth prong. The City contended that if the ban was unconstitutional due to exemptions, those exemptions should be severed. However, the court ruled against severing the Ordinance, stating it would impose civil and criminal sanctions on currently authorized activities and restrict protected speech, particularly political speech.
The City also challenged the district court's award of attorneys' fees to Ballen under 42 U.S.C. § 1988, which allows reasonable fees to the prevailing party unless special circumstances exist. The court maintained that Ballen was entitled to fees without any special circumstances rendering the award unjust. Furthermore, the City argued the fees awarded were excessive. In the Ninth Circuit, the "lodestar" method is used to determine fee amounts, which involves multiplying the hours reasonably spent on litigation by a reasonable hourly rate, followed by an assessment against twelve factors to adjust the lodestar figure as needed.
Key factors influencing the determination of attorneys' fees include: the preclusion of other employment due to case acceptance, the customary fee structure, whether the fee is fixed or contingent, time limitations imposed by the client or circumstances, the amount involved and results obtained, the attorneys' experience and reputation, the "undesirability" of the case, the nature and length of the client-attorney relationship, and awards in similar cases. The district court's awarded lodestar figure was challenged by the City, arguing for a reduction based on the brief duration of proceedings, minimal formal discovery, and limited joint court appearances, suggesting that the hours claimed by Ballen's counsel were excessive. The City compared its counsel's fewer hours to assert that Ballen's counsel overworked the case. The court emphasized that adjustments to the lodestar figure are rare and that it represents a presumptively accurate measure of reasonable fees. District courts have discretion to modify fees to address any excessive efforts not justified by the case. Ultimately, the court found no abuse of discretion in the fee award to Ballen. Additionally, Redmond's Ordinance was deemed to violate Central Hudson's four-part test by discriminating against commercial speech rights in a way that exceeded what was necessary to serve legitimate governmental interests. The district court's summary judgment and attorney fee grant in favor of Ballen were affirmed. The appeals were consolidated in this case.
