METROMEDIA INC v. CITY OF SAN DIEGO

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Court of Appeal, Fourth District, Division 1, California.

METROMEDIA, INC., et al., Plaintiffs and Respondents, v. CITY OF SAN DIEGO et al., Defendants and Appellants.

Civ. 14591.

Decided: February 11, 1977

John W. Witt, City Atty., and C. Alan Sumption, Deputy City Atty., for defendant and appellant City of San Diego. Walter C. Wencke, San Diego, for amicus curiae San Diego Environmental Charitable Trust, on behalf of defendants and appellants. Carter J. Stroud, City Atty., City of Alameda, for amicus curiae City of Alameda, and John W. Scanlon, City Atty., City of Hayward, for amicus curiae City of Hayward, on behalf of defendants and appellants. Gibson, Dunn & Crutcher by Theodore B. Olson, Los Angeles, and Hillyer & Irwin by Oscar F. Irwin, San Diego, for plaintiff and respondent Metromedia, Inc. Snell & Wilmer by John J. Bouma and Guy G. Gelbron, Phoenix, Ariz., and Higgs, Fletcher & Mack by Joe N. Turner, San Diego, for plaintiff and respondent Pacific Outdoor Advertising Co., Inc. Donovan Leisure Newton & Irvine by Mahlon F. Perkins, Jr., New York City, for amicus curiae American Association of Advertising Agencies, on behalf of plaintiffs and respondents. Weil, Guttman & Davis by Gilbert H. Weil, New York City, for amicus curiae Association of National Advertisers, Inc., on behalf of plaintiffs and respondents. Phillip Tocker, Brownsville, Tex., for amicus curiae Outdoor Advertising Association of America, Inc., on behalf of plaintiffs and respondents.

This appeal raises issues concerning the constitutionality of a city ordinance which prohibits the erection and maintenance of all off-premise advertising displays within the entire limits of a large metropolitan city. The validity of such sweeping legislation in this area has not been considered by an appellate court in California since 1909 (see Varney & Green v. Williams, 155 Cal. 318, 100 P.867).

The City of San Diego appeals from a summary judgment declaring City Ordinance No. 10795 (New Series) unconstitutional and permanently enjoining the City from taking any steps to enforce the ordinance.1 Separate actions attacking the ordinance by respondents Metromedia, Inc. and Pacific Outdoor Advertising, Inc. had been consolidated by stipulation. After extensive interrogatories and requests for admissions had been answered, all parties moved for summary judgment based upon a joint stipulation of facts, the pleadings and papers filed, and matters subject to judicial notice.

The respondent companies are engaged in the outdoor advertising business. Each of them owns a substantial number of outdoor advertising signs in San Diego which were lawfully erected and which have a substantial market value. On March 14, 1972 the San Diego City Council adopted Ordinance No. 10795 (New Series). As it relates to and affects respondents' businesses, the ordinance cuts a wide swath, prohibiting all off-premise outdoor advertising displays within the City and providing for the abatement of all such existing advertising displays over a four-year period.

Generally expressing the intent to promote safety, economic, aesthetic and general welfare interests, the ordinance first declares:

‘A. PURPOSE AND INTENT

‘It is the purpose of these regulations to eliminate excessive and confusing sign displays which do not relate to the premises on which they are located; to eliminate hazards to pedestrians and motorists brought about by distracting sign displays; to ensure that signing is used as identification and not as advertisement; and to preserve and improve the appearance of the City as a place in which to live and work.

‘It is the intent of these regulations to protect an important aspect of the economic base of the City by preventing the destruction of the natural beauty and environment of the City, which is instrumental in attracting nonresidents who come to visit, trade, vacation or attend conventions; to safeguard and enhance property values; to protect public and private investment in buildings and open spaces; and to protect the public health, safety and general welfare.’

The ordinance next prohibits all outdoor advertising display signs in the City except signs which designate the owner or occupant of the premises upon which a sign is placed, identifying such premises or advertising goods manufactured or produced or services rendered on the premises upon which a sign is placed. Existing signs which do not meet the requirements of the ordinance are declared nonconforming, and the ordinance provides for the abatement of all such signs, based upon an adjusted market value. Under the ordinance the adjusted market value of a sign is computed upon the basis of its original cost, less ten percent of the original cost for every year a sign has been standing.

The abatement schedule provided in the ordinance is as follows:

Irrespective of adjusted market value, the ordinance requires the removal of all off-premise signs which can be viewed from a freeway, parkway or scenic highway within 90 days of its effective date. The ordinance makes no provision for compensation to the owners of the signs it requires to be removed.

The written stipulation of facts filed in the superior court was prefaced with this recital:

The parties to this litigation are filing cross-motions for summary judgment. This Stipulation of Facts is entered into for the purpose of these motions and for any judgment thereon or appeals therefrom and for no other purpose. The parties agree that the facts specified herein are true for said purpose only and none of the parties hereto shall be bound thereby for any other purpose.'

The following pertinent facts (as originally numbered) were set forth in the written stipulation:

‘2. If enforced as written, Ordinance No. 10795 will eliminate the outdoor advertising business in the City of San Diego.

‘13. Each of the plaintiffs are the owners of a substantial number of outdoor advertising displays (approximately 500 to 800) in the City of San Diego.

‘14. Substantially all of the displays owned by plaintiffs are located on property leased by the owners thereof to the plaintiffs for the purposes of maintaining outdoor advertising displays thereon.

‘15. Each of the displays were legally erected in full compliance with all applicable municipal and state laws and are in full compliance with such laws except for the contested legality of Ordinance No. 10795.

‘16. The cost of producing and erecting each display was substantial.

‘17. The displays have varying values depending upon their size, nature and location.

‘18. Each of the displays has a fair market value, as a part of an income-producing system, of between $2,500 and $25,000.

‘19. Each display has a remaining useful income-producing life in excess of 25 years.

‘20. All of the signs owned by plaintiffs in the City of San Diego are located at areas zoned for commercial and industrial purposes.

‘28. Outdoor advertising increases the sales of products and produces numerous direct and indirect benefits to the public. Valuable commercial, political and social information is communicated to the public through the use of outdoor advertising. Many businesses and politicians and other persons rely upon outdoor advertising because other forms of advertising are insufficient, inappropriate and prohibitively expensive.

‘29. Enforcement of Ordinance No. 10795, in addition to eliminating outdoor advertising within the City of San Diego, will adversely affect plaintiffs' businesses outside the City of San Diego in that many national or state-wide advertisers will be inclined to select other media capable of communicating with a wider segment of the consuming public, including San Diego, rather than selecting outdoor advertising which would be unable to communicate with the citizens of San Diego.

‘31. Many of the plaintiffs' signs are within 660 feet and others are within 500 feet of Interstate or Federal Aid Primary highways and are designed to be viewed therefrom.

‘34. ‘The amortization provisions' of Ordinance No. 10795 have no reasonable relationship to the fair market value, useful life or income generated by the signs and were not designed to have such a relationship.’

In their motion for summary judgment, respondents attacked the ordinance on seven grounds. The same issues are argued on appeal.

1. Is the ordinance an improper exercise of the police power?

2. Does the ordinance deprive respondents of their property without due process of law and without payment of just compensation as required by the Federal and California Constitutions?

3. Does the ordinance deny equal protection of the law?

4. Does the ordinance violate First Amendment guarantees of freedom of speech?

5. Is the ordinance invalid due to a conflict with or preemption by federal and state legislation?

6. Is the abatement schedule provided in the ordinance unconstitutional?

7. Is the ordinance invalid because of the City's failure to comply with the California Environmental Quality Act?

Before entering its judgment invalidating the ordinance and enjoining its enforcement, the trial court filed and entered its written Memorandum of Intended Ruling. Reference to the memorandum indicates the trial court predicated its judgment on two grounds: first, the ordinance was an unreasonable exercise of the police power; and, second, the ordinance violated First Amendment guarantees of freedom of speech.

IS ORDINANCE NO. 10795 AN UNREASONABLE EXERCISE OF THE POLICE POWER?

Article XI, section 7, of the California Constitution expressly confers on cities and towns the power to make and enforce within their limits all local, police, sanitary and other ordinances and regulations not in conflict with the general laws. This power is as broad as that possessed by the Legislature itself where it is exercised within the confines of the City and is not in conflict with the state's general laws (In re Maas, 219 Cal. 422, 425, 27 P.2d 373; Carlin v. City of Palm Springs, 14 Cal.App.3d 706, 711, 92 Cal.Rptr. 535).

Within this grant of authority, local governments may promulgate zoning ordinances which regulate and restrict land use. The power to enact and enforce such measures is inherent in the police power (People v. Johnson, 129 Cal.App.2d 1, 5, 277 P.2d 45). It has long been recognized that the reasonable regulation of signs and billboards constitutes a valid exercise of the police power (Carlin v. City of Palm Springs, supra, 14 Cal.App.3d 706, 712, 92 Cal.Rptr. 535; Metromedia, Inc. v. City of Pasadena, 216 Cal.App.2d 270, 273–274, 30 Cal.Rptr. 731; National Advertising Co. v. County of Monterey, 211 Cal.App.2d 375, 378, 27 Cal.Rptr. 136).

While the legislative body of a city has broad discretion in determining what is reasonable in endeavoring to protect the health, safety, morals and general welfare of its citizens, the ordinances it enacts to accomplish these aims must be reasonable in object and not arbitrary in operation, for counterbalancing the public right is a property owner's right to make reasonable use of his property and the businessman's right to engage in lawful business (Carlin v. City of Palm Springs, supra, 14 Cal.App.3d 706, 711–713, 92 Cal.Rptr. 535). When reviewing legislation, challenged as an improper or unreasonable exercise of the police power, courts must be mindful that they are examining the act of a coordinate branch of the government, and the legislative power must be upheld ‘unless manifestly abused so as to infringe on constitutional guarantees.’ (City of Los Angeles v. Gage, 127 Cal.App.2d 442, 451, 274 P.2d 34, 39.)

Initially we reject, as did the trial court, respondents' claim the ordinance is invalid because it was enacted primarily to accomplish aesthetic purposes. In making this assertion respondents rely heavily on Varney & Green v. Williams, supra, 155 Cal. 318, 100 P. 867, a 1909 case in which the Supreme Court held, among other things, that aesthetic considerations alone no not justify the exercise of the police power to eliminate outdoor advertising displays.

As the City and its amici point out, Varney & Green was decided before the acceptance of comprehensive zoning as a valid exercise of the police power. Later California decisions have distinguished the earlier case by recognizing the inseparable interrelationship between aesthetic and economic considerations, holding that the combination of these and other similar factors may properly influence city officials in enacting measures affecting billboard advertising displays (City of Escondido v. Desert Outdoor Advertising, Inc., 8 Cal.3d 785, 790, 106 Cal.Rptr. 172, 505 P.2d 1012; Desert Outdoor Advertising, Inc. v. County of San Bernardino, 255 Cal.App.2d 765, 769, 63 Cal.Rptr. 543).

Here the stated, as well as the obvious, purpose of the ordinance was to promote highway safety and to secure economic benefits for the community, as well as to enhance community aesthetic values. The ordinance cannot be invalidated on the ground it was enacted solely or primarily for aesthetic purposes.

Our chief concern with the ordinance lies in its broad sweep. No California appellate decision has approved a municipal ordinance which prohibits all outdoor off-premises advertising displays throughout the entire area of a city. To the contrary, in Varney & Green v. Williams, supra, 155 Cal. 318, 100 P. 867, the only case considering an ordinance absolutely prohibiting the erection or maintenance of billboards for advertising purposes within the town limits, the Supreme Court held the ordinance invalid, stating in conclusion:

‘We are not here, however, concerned with the extent to which the legislative power may, in the effort to protect the public safety or morals, regulate the manner of erecting or using billboards. The ordinance in question does not attempt such regulation, but undertakes to absolutely forbid the erection or maintenance of any billboard for advertising purposes. We have no doubt that this sweeping prohibition was beyond the power of the town trustees.’ (Varney & Green v. Williams, 155 Cal. 318, 321, 100 P. 867, 868.)

The City asserts the holding of Varney & Green invalidating an ordinance totally prohibiting billboards as beyond the power of municipal authorities is no longer controlling. It again points out the case was decided before there was judicial acceptance of comprehensive zoning and that automobile traffic and urban congestion have vastly increased since 1909. Furthermore, the City contends the case was decided on the ground the ordinance involved was based solely on aesthetic considerations and that it has been distinguished by later California decisions.

Our reading of Varney & Green leads us to the conclusion the ordinance under consideration there was invalidated for two reasons: (1) because it was based solely on aesthetic considerations; and (2) because it did not attempt the regulation of billboards, but rather undertook ‘to absolutely forbid the erection or maintenance of any billboard for advertising purposes.’ While, as we have pointed out, later California cases may be said to have modified the strict holding of Varney & Green as it relates to aesthetic considerations, none has sought to undercut its holding that a total ban on billboards for advertising purposes is beyond the power of municipal authorities. In City of Escondido v. Desert Outdoor Advertising, Inc., supra, 8 Cal.3d 785, 106 Cal.Rptr. 172, 505 P.2d 1012, the ordinance in question prohibited all signs and advertising displays adjacent to freeways. In upholding the validity of the ordinance, the Supreme Court stated:

‘Moreover, City's ordinance does not purport to prohibit all signs and advertisements but only to regulate their location so that they do not constitute nuisances and for the obvious purposes of promoting highway safety as well as enhancing community aesthetic values. The case of Varney & Green v. Williams, 155 Cal.318, 100 P. 867, is readily distinguishable. There the court held invalid an ordinance which forbade all advertising billboards within city limits. (See also Metromedia, Inc. v. City of Pasadena, 216 Cal.App.2d 270, 273–274, 30 Cal.Rptr. 731. . . . ’

It is significant that the court in no way questioned its earlier holding but rather distinguished the limited regulatory aspect of the ordinance under consideration from the all-inclusive prohibitory features of the ordinance its earlier decision had condemned.2

Irrespective of the holding in Varney & Green, additional considerations compel us independently to conclude that the City's ordinance banning all off-premise outdoor advertising within its boundaries exceeds constitutional limits. In enacting and attempting to enforce Ordinance No. 10795, the City purports to act under its police power. It concedes the enforcement of the ordinance will eliminate the outdoor advertising business in the City of San Diego and will require respondents to remove hundreds of advertising display signs having a fair market value of millions of dollars, all of which are located in commercial and industrial zones of the City, without payment of compensation.

The legitimate exercise of the police power does not run afoul of due process, and the fact that an individual, or his business or property, may sustain damage as the result of its proper exercise to protect the health, safety, morals and general welfare of the community does not entitle him to compensation. Damage brought about through the proper exercise of the police power is merely one of the prices an individual must pay as a member of society (City of Los Angeles v. Gage, supra, 127 Cal.App.2d 442, 452–453, 274 P.2d 34).

While the grant empowering cities to exercise the police power is broad and has been uniformly interpreted by the courts to include the right to reasonably regulate outdoor advertising displays within their boundaries, it is not without limitation. Their power to enact and enforce ordinances in the exercise of the police power is limited to those ordinances which do not conflict with the general laws of the state (Cal.Const., art. XI, § 7).

In Business and Professions Code section 5226, the Legislature has stated:

‘The regulation of advertising displays adjacent to any interstate highway or primary highway as provided in Section 5405 is hereby declared to be necessary to promote the public safety, health, welfare, convenience and enjoyment of public travel, to protect the public investment in such highways, to preserve the scenic beauty of lands bordering on such highways, and to insure that information in the specific interest of the traveling public is presented safely and effectively, recognizing that a reasonable freedom to advertise is necessary to attain such objectives. The Legislature finds:

‘(a) Outdoor advertising is a legitimate commercial use of property adjacent to roads and highways.

‘(b) Outdoor advertising is an integral part of the business and marketing function, and an established segment of the national economy, and should be allowed to exist in business areas, subject to reasonable controls in the public interest.’

Business and Professions Code section 5226 is a part of the Outdoor Advertising Act (Bus. & Prof. Code § 5200 et seq.). Generally, the provisions of the act apply only to the unincorporated areas of the state:

‘. . . except that the placing of advertising displays within 660 feet from the edge of the right-of-way of, and the copy which is visible from, interstate highways or primary highways, including the portions of such highways located in incorporated areas, shall be governed by this chapter.’ (Emphasis added.) (Bus. & Prof. Code § 5271.)

The City has stipulated that many of respondents' signs are located within 660 feet of such highways in the City and that they are designed to be viewed from such highways. It has further stipulated that all of respondents' signs are located in areas zoned for commercial or industrial purposes. To the extent the City's ordinance completely bans and requires removal of all such signs, it is directly in conflict with Business and Professions Code section 5226, which states such signs ‘. . . should be allowed to exist in business areas, subject to reasonable controls in the public interest.'3

Moreover, signs which abut interstate and primary highways are of state-wide concern because of their effect upon the state's right to federal highway funds. Undoubtedly the paramount legislative purpose prompting the California Legislature to enact the Outdoor Advertising Act was its concern not to lose California's share of federal highway funds and not to incur any penalty as a result of noncompliance with the Federal Highway Beautification Act (23 U.S.C. § 131, et seq.). Under the Act a state must enact laws providing ‘effective control’ of billboards or be subject to a penalty of 10% of its allocated federal highway funds during each year of noncompliance (23 U.S.C. § 131(b)). Section 131(g) of the Act provides that just compensation shall be paid upon removal of any outdoor advertising sign, display, or device lawfully erected under state laws. Section 131(b)'s requirement that states provide ‘effective control’ undoubtedly includes section 131(g)' s mandate for payment of ‘just compensation.’ (See 55 Ops.Atty.Gen. 1.) Thus enforcement of the City's ordinance requiring the removal of signs in this category without payment of compensation might well subject the State of California to the loss of 10% of the funds allocated by the federal government for highway construction purposes.

Equally as important as the considerations discussed above, and of broader impact, is the conceded fact that enforcement of the ordinance will eliminate the outdoor advertising business in the City of San Diego. A municipality's power to regulate lawful businesses may not be used to eliminate them entirely (City of Escondido v. Desert Outdoor Advertising, Inc., supra, 8 Cal.3d 785, 790, 106 Cal.Rptr. 172, 505 P.2d 1012; Parker v. Colburn, 196 Cal. 169, 176, 236 P. 921). This rule does not apply to a business whose operation constitutes a nuisance, inimical to the public welfare (City of Escondido v. Desert Outdoor Advertising, Inc., supra, 8 Cal.3d 785, 790, 106 Cal.Rptr. 172, 505 P.2d 1012; Sunset Amusement Co. v. Board of Police Commissioners, 7 Cal.3d 64, 80, 101 Cal.Rptr. 768, 496 P.2d 840). Although the ordinance in question does not declare signs which violate its provisions to be a nuisance, the City seeks to come within the exception to the general rule by invoking another provision of its municipal code which declares all property uses in violation of code provisions to be public nuisances.

If the interrelation of the code sections has the effect of constituting signs in violation of the ordinance in question as nuisances, such a declaration would still be subject to the constitutional protection against unreasonable and arbitrary action on the part of the City (People ex rel. Dept. Pub. Wks. v. Adco Advertisers, 35 Cal.App.3d 507, 519, 110 Cal.Rptr. 849). The City's contention it may declare all outdoor advertising signs, no matter where located within its limits, to be nuisances, inimical to the public welfare, flies directly in the face of the contrary findings by the Legislature in Business and Professions Code section 5226 that:

‘(a) Outdoor advertising is a legitimate commercial use of property adjacent to roads and highways.

‘(b) Outdoor advertising is an integral part of the business and marketing function, and an established segment of the national economy, and should be allowed to exist in business areas, subject to reasonable controls in the public interest.’

A business may be inherently lawful and still subject to regulation under the police power, but when a lawful business is regulated, and certainly where it is prohibited, it is a judicial question whether the law or ordinance is a lawful exercise of the police power (McKay Jewelers, Inc. v. Bowron, 19 Cal.2d 595, 600, 122 P.2d 543). Here, we are not dealing with an ordinance which regulates or prohibits a few signs, or which affects only signs located in certain zones or areas of the City. Enforcement of the ordinance in question will require the removal of hundreds of signs having a conceded value in the millions of dollars. The facts before us indisputably show enforcement of the ordinance will bring about substantial private loss. While the stated purposes of the ordinance may be laudable, the City presents no convincing argument why the public benefits sought cannot be achieved by more reasonable and less drastic measures. The stipulated facts simply do not support the proposition that all off-premise advertising signs within the City are public nuisances, or that it is reasonably necessary to remove all of them to promote safety, general economic interests, or even aesthetic values. The ordinance is too broad, too general and too inclusive. We have no doubt the enactment of the ordinance and its attempted enforcement is beyond the power of city officials and constitutes an unreasonable and arbitrary exercise of the police power.

This holding requires us to affirm the superior court's judgment and makes it unnecessary to consider whether the broad sweep of the ordinance also infringes upon First Amendment or Equal Protection rights or whether its amortization provisions meet constitutional standards.

The judgment is affirmed.

FOOTNOTES

1.  Two sections of the ordinance were excepted from the judgment. These sections created special sign control districts in areas of the City known as La Jolla and Rancho Bernardo and regulated on-premise signs in those areas. They are not involved in this dispute.

2.  Courts in other jurisdictions which have considered municipal ordinances totally banning outdoor advertising displays within the entire limits of a city have found such ordinances to be an unreasonable and arbitrary exercise of the police powers (cf. Combined Communications Corporation v. City & Cty. of Denver, 542 P.2d 79 (Colo.1975); Norate Corporation v. Zoning Board of Adjustment, 417 Pa. 397, 207 A.2d 890 (1965); Daikeler v. Zoning Bd. of Adjust. of Montgomery Tp., 1 Pa.Cmwlth. 445, 275 A.2d 696 (1971); Central Advertising Company v. City of Ann Arbor, 321 Mich. 533, 218 N.W.2d 27 (1974).

3.  Contrary to the City's contention, Business and Professions Code section 5230 does not operate to authorize its total ban of advertising display signs. That section merely authorizes cities and counties to impose restrictions on such signs, equal or greater than those imposed by the Octdoor Advertising Act itself.

AULT, Associate Justice.

GERALD BROWN, P. J., and COLOGNE, J., concur.