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International Outdoor, Inc. v. City of Troy

United States District Court, E.D. Michigan, Southern Division

June 30, 2017

INTERNATIONAL OUTDOOR, INC., Plaintiff,
v.
CITY OF TROY, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS (DOC. 6)

          GEORGE CARAM STEEH UNITED STATES DISTRICT JUDGE.

         Plaintiff International Outdoor, Inc. alleges that defendant City of Troy's Sign Ordinance, (Doc. 1-2), violates the First Amendment. Count I alleges that the Ordinance constitutes an unconstitutional prior restraint. Count II alleges that the Ordinance contains content based restrictions imposed without a compelling government interest, and therefore, is unconstitutional. The matter is presently before the Court on defendant's motion to dismiss. (Doc. 6). Oral argument was held on June 26, 2017. For the reasons stated below, defendant's motion is granted in part and denied in part.

         I. Background

         Plaintiff, an outdoor advertising company, erects billboards throughout Southeast Michigan. (Doc. 1 at PageID 3-4). The billboards display “truthful commercial messages” and non-commercial messages including political speech. (Doc. 1 at PageID 4). Plaintiff “earns revenue by charging advertisers to display” these messages. (Id.).

         Defendant, a Michigan municipal corporation, regulates billboards and other signs through the Sign Ordinance in Chapter 85 of defendant's Code of Ordinances. (Doc. 1 at PageID 2, 4). Section 85.01.04(A) requires a permit for each sign, unless it meets one of several enumerated exceptions. (Doc. 1-2 at PageID 18). Billboards are considered “ground signs, ” which are defined as “[a] freestanding sign supported by one or more uprights, braces, or pylons located in or upon the ground and not attached to any building.” (Doc. 1-2 at PageID 17). Ground signs are subject to specific zoning district regulations outlined in section 85.02.05(C). (Doc. 1-2 at PageID 26-28). These regulations set limits on a sign's size, height, and location. (Id.). Pursuant to section 85.01.08(B)(1), defendant's Building Code Board of Appeals may grant a variance to signs that do not comply with the requirements of the Ordinance. (Doc. 1-2 at PageID 23).

         Plaintiff sought to erect two digital billboards in a M-1 district. (Doc. 1 at PageID 5, 7). Plaintiff applied for a variance because the billboards did not meet the zoning district regulations of section 85.02.05(C)(5). (Doc. 1 at PageID7). The Building Code Board of Directors held a public hearing that spanned two meeting dates, and thereafter denied the variance. (Doc. 1 at PageID 8).

         II. Legal Standard

         A. Federal Rule of Civil Procedure 12(b)(1)

         Defendant moves to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), arguing that plaintiff lacks standing. Defendant moves under the wrong rule. The Court, therefore, shall consider the argument under Fed.R.Civ.P. 12(b)(1). The Court is “bound to consider the 12(b)(1) motion first, since the Rule 12(b)(6) challenge becomes moot if this court lacks subject matter jurisdiction.” Moir v. Greater Cleveland Regional Transit Authority, 895 F.2d 266, 269 (6th Cir. 1990). It is the plaintiffs' burden to demonstrate that the court has subject matter jurisdiction. RMI Titanium Co v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996).

         Motions to dismiss for lack of subject matter jurisdiction fall into two general categories: facial attacks and factual attacks.” United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.1994). “A facial attack is a challenge to the sufficiency of the pleading itself. On such a motion, the court must take the material allegations of the petition as true and construed in the light most favorable to the non-moving party.” Id. (emphasis in original). “A factual attack, on the other hand, is not a challenge to the sufficiency of the pleading's allegations, but a challenge to the factual existence of subject matter jurisdiction. On such a motion, no presumptive truthfulness applies to the factual allegations” and “the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Id. (emphasis in original). Defendant's challenge to plaintiff's standing is a factual attack. Thus, no presumptive truthfulness applies to the factual allegations in the complaint. Id.

         B. Federal Rule of Civil Procedure 12(b)(6)

         When a party attacks a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must decide whether the complaint states a claim upon which relief may be granted. Generally speaking, the court must construe the complaint in favor of the plaintiff, accept the allegations of the complaint as true, and determine whether the plaintiff's factual allegations present plausible claims. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-56 (2007). Even though a complaint need not contain “detailed” factual allegations, its “factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true.” Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007).

         III. Analysis

         A. Standing

         The “constitutional minimum of standing contains three elements;” (1) an “injury in fact, ” (2) “a causal connection between the injury and the conduct complained of, ” and (3) “it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal quotations and citations omitted).

         Defendant construes the complaint to challenge only the provisions relating to permit requirement exceptions. Defendant asserts that plaintiff failed to satisfy redressability because, even if the exception provisions were struck down, the permit provision and specific zoning district requirements would bar plaintiff's billboards. Defendant's argument mirrors Midwest Media Property L.L.C. v. Symmes Tp., Ohio, 503 F.3d 456 (6th Cir. 2007). But Midwest Media differs from this case, because the plaintiff there challenged specific provisions of the township's sign regulations. Here, however, plaintiff challenges the entire Ordinance. Plaintiff's focus on the exception provisions merely relates to their argument that the Ordinance is content based. Plaintiff's injury would be redressed if the Ordinance was struck down, and therefore, defendant's argument fails.

         B. Count II: Content Based Restriction

         1. Applicable Standard

         The parties disagree on which standard governs Count II. Plaintiff argues that the Ordinance is a content-based restriction, and therefore, under Reed v. Town of Gilbert, Ariz., 135 S.Ct. 2218 (2015), strict scrutiny applies. Defendant argues that plaintiff's claims relate to commercial speech, and therefore, the applicable standard is that set forth in Central Hudson Gas & Electric Corp. v. Public Service Comm'n, 447 U.S. 557 (1980). Neither case, however, provides a perfect parallel nor cleanly dictates which standard applies here. The Court, therefore, conducts an analysis of both lines of cases and, for the reasons stated below, finds that Central Hudson applies.

         a. Content-Based Restriction

         “[A] government, including a municipal government vested with state authority, ‘has no power to restrict expression because of its message, its ideas, its subject matter, or its content.'” Reed 135 S.Ct. at 2226 (quoting Police Dept. of Chicago v. Mosley,408 U.S. 92, 95 (1972)). Content based laws are those that “target speech based on its communicative content” including “the topic discussed or the idea or message expressed.” Id. at 2226-27 (internal citations omitted). Courts must “consider whether a regulation of speech ‘on its face' draws distinctions based on the message a speaker conveys.” Id. at 2227 (internal citations omitted). Examples of facial distinctions include “defining regulated speech by particular subject matter” or “its function or purpose.” Id. Laws that are facially content neutral, but “cannot be ‘justified without reference to the content of the regulated speech' or that were adopted by the government ‘because of disagreement with the message [the speech] conveys', ” are also considered content-based regulations. Id. (citing Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989). Content-based laws ...


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