Opinion
No. 3-01-CV-0612-R
November 6, 2002
FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Defendant City of Irving has filed a motion for attorney's fees as the prevailing party in this civil rights action brought under 42 U.S.C. § 1983. For the reasons stated herein, the motion should be denied.
I.
Plaintiff Paradigm Media Group d/b/a Billboard Development sued defendant in federal district court alleging that Irving City Ordinance No. 7757, which prohibits offsite commercial billboard advertising within the city limits except at sports facilities, "impermissibly discriminates between speech based on the content of the speech and the identity of the speaker" in violation of the First and Fourteenth Amendments to the United States Constitution. (Plf. Compl. at 4-5, ¶¶ 19-22). By order dated July 30, 2002, the court granted summary judgment in favor of defendant and dismissed the case with prejudice. Paradigm Media Group, Inc. v. City of Irving, 2002 WL 1776922 (N.D. Tex. Jul. 30, 2002). Defendant then filed a motion for attorney's fees pursuant to 42 U.S.C. § 1988. The district judge initially granted the motion and awarded defendant $117,678.50 in fees through the date of judgment, plus an additional $25,000 on appeal to the Fifth Circuit and $50,000 if plaintiff filed a petition for writ of certiorari in the United States Supreme Court. See ORDER, 8/16/02. At plaintiff's request, the court vacated its order to allow further briefing. See ORDER, 8/21/02. The motion for attorney's fees was then referred to the magistrate judge for report and recommendation. Id.
The Irving sign ordinance generally prohibits the construction of all new commercial billboards after June 3, 1999. Among the stated purposes of the ordinance are "the reduction of `visual clutter along the streets and highways;' prevention of `traffic hazards associated with signs distracting the attention of drivers;' `improving the image of the City;' and `improving and preserving the aesthetic appeal of its residential and commercial districts.'" Paradigm Media Group, Inc. v. City of Irving, 2002 WL 1776922 at *2 (N.D. Tex. Jul. 30, 2002), quoting Ord. No. 7757, preamble. Notwithstanding the general ban of commercial billboard construction, the ordinance permits: (1) on-premises signs that advertise a use, product or service that is sold or manufactured on the site; (2) multi-tenant directory signs; (3) noncommercial signs; and (4) advertising structures at sports facilities. Id. at *1-2. By this suit, plaintiff challenges only the "sports facility" exception. (Plf. Compl. at 4-5, ¶ 19).
While the motion was pending, counsel conferred and stipulated to a reasonable amount of attorney's fees in the event the court decides that fees should be awarded to defendant. By agreement of the parties, such fees are: (1) $80,000 for services rendered in the trial court; (2) $15,000 for briefing to the Fifth Circuit; (3) $10,000 if oral argument is granted by the Fifth Circuit; (4) $10,000 if plaintiff files a petition for writ of certiorari in the U.S. Supreme Court; and (5) $40,000 if certiorari is granted. (Jt. Stat. Rep., 9/19/02). However, plaintiff continues to oppose any fee award under 42 U.S.C. § 1988 and the applicable case law. The motion has been fully briefed by the parties and is ripe for determination.
II.
The Civil Rights Attorney's Fees Awards Act of 1976, as amended, provides that "the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988(b). While a prevailing plaintiff is presumptively entitled to reasonable attorney's fees in all but special circumstances, a prevailing defendant may recover fees only if the court finds that "the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421, 98 S.Ct. 694, 700, 54 L.Ed.2d 648 (1978). See also Hughes v. Rowe, 449 U.S. 5, 14-15, 101 S.Ct. 173, 178-79, 66 L.Ed.2d 163 (1980) (applying Christiansburg standard to fee awards under 42 U.S.C. § 1988); Dean v. Riser, 240 F.3d 505, 508 (5th Cir. 2001). The stringent standard applicable to defendants "is intended to ensure that plaintiffs with uncertain but arguably meritorious claims are not altogether deterred from initiating litigation by the threat of incurring onerous legal fees should their claims fail." Myers v. City of West Monroe, 211 F.3d 289, 292 n. 1 (5th Cir. 2000), quoting Aller v. New York Board of Elections, 586 F. Supp. 603, 605 (S.D.N.Y. 1984). In assessing frivolity, the critical inquiry is "whether the case was so lacking in merit that it was groundless, rather than whether the claim was ultimately successful." United States v. State of Mississippi, 921 F.2d 604, 609 (5th Cir. 1991), citing Jones v. Texas Tech University, 656 F.2d 1137, 1145 (5th Cir. 1981). The factors relevant to this determination are: (1) whether the plaintiff established a prima facie case; (2) whether the defendant offered to settle the case; and (3) whether the district court dismissed the case or held "a full-blown trial." Id. at 609; EEOC v. Kimbrough Investment Co., 703 F.2d 98, 103 (5th Cir. 1983).
A.
In rejecting plaintiff's constitutional challenge to the Irving sign ordinance, the district judge relied almost exclusively on Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 101 S.Ct. 2882, 69 L.Ed.2d 800 (1981). The Metromedia case involved a city ordinance that imposed substantial restrictions on the erection of outdoor advertising displays. The stated purpose of the ordinance was "to eliminate hazards to pedestrians and motorists brought about by distracting sign displays" and "to preserve and improve the appearance of the City[.]" Id., 101 S.Ct. at 2885. The ordinance permitted onsite commercial advertising, but prohibited other commercial advertising and noncommercial advertising using fixed-structure signs unless permitted by one of 12 specified exceptions. Id. at 2885-86. Plaintiffs, who were engaged in the outdoor advertising business, sued the city to enjoin enforcement of the ordinance on First Amendment grounds.
A plurality of the Metromedia court upheld the city's ban of offsite commercial advertising under the three-part test established in Central Hudson Gas Electric Corp. v. Public Service Comm'n, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). In Central Hudson, the Supreme Court held that commercial speech is entitled to First Amendment protection if it concerns lawful activity and is not misleading. A restriction on otherwise protected commercial speech is valid only if it: (1) seeks to implement a substantial governmental interest, (2) directly advances that interest, and (3) reaches no further than necessary to accomplish the given objective. Metromedia, 101 S.Ct. at 2892, citing Central Hudson, 100 S.Ct. at 2350-51. The Court had little difficulty in concluding that the twin goals of the San Diego sign ordinance — traffic safety and aesthetics — were "substantial governmental goals" and that the ban of offsite commercial billboards was "the most direct and perhaps the only effective approach to solving the problems they create . . ." Metromedia, 101 S.Ct. at 2892-93. More troubling was the sign company's argument that the distinction between offsite and onsite commercial advertising did not directly advance the city's stated objectives. Ultimately, the Court rejected that argument as well:
A majority of the Supreme Court went on to conclude that the San Diego sign ordinance was unconstitutionally overbroad to the extent it afforded a greater degree of protection to commercial than noncommercial speech. Metromedia, 101 S.Ct. at 2895-99 (White, J., joined by Stewart, Marshall, and Powell, JJ.). Although Justices Brennan and Blackmun concurred in the judgment, both would have invalidated the city's ban of offsite commercial advertising. Id. at 2907-09 (Brennan, J., joined by Blackmun, J.). Three dissenting justices — Chief Justice Burger and Justices Rehnquist and Stevens — wrote separately to express their view that a city may constitutionally ban all outdoor billboard advertising. All the dissenters agreed that the limited exceptions contained in the sign ordinance, such as the one permitting onsite commercial advertising, did not render the ordinance unconstitutional. Id. at 2917 (Stevens, J.); 2922 n. 6 (Burger, CJ.); 2925 (Rehnquist, J.). Thus, a total of seven justices believed that the city's ban of offsite commercial advertising was valid.
In the first place, whether onsite advertising is permitted or not, the prohibition of offsite advertising is directly related to the stated objectives of traffic safety and esthetics. This is not altered by the fact that the ordinance is underinclusive because it permits onsite advertising. Second, the city may believe that offsite advertising, with is [sic] periodically changing content, presents a more acute problem than does onsite advertising. [Citation omitted]. Third, San Diego has obviously chosen to value one kind of commercial speech — onsite advertising — more than another kind of commercial speech — offsite advertising. The ordinance reflects a decision by the city that the former interest, but not the latter, is stronger than the city's interests in traffic safety and esthetics . . . It does not follow from the fact that the city has concluded that some commercial interests outweigh its municipal interests in this context that it must give similar weight to all other commercial advertising. Thus, offsite commercial billboards may be prohibited while onsite commercial billboards are permitted.Id. at 2894-95.
B.
Unlike the city ordinance at issue in Metromedia, the Irving sign ordinance applies primarily to offsite commercial billboard advertising. A "billboard" is defined as "an outdoor advertising sign or structure, which advertises a use, product or service not found on the premises where the sign is located." Paradigm, 2002 WL 1776922 at *1, citing Ord. No. 7757, § 7-1. Thus, the ordinance implicitly allows for onsite commercial billboard advertising. Other exceptions permit the construction of "multi-tenant directory signs," noncommercial signs, and "advertising structures" at sports facilities. Id., citing Ord. No. 7757, §§ 7-7, 7-15 7-17. The term "advertising structure" is defined as "any structure erected in conjunction with an [sic] on the same site as a sports facility for the purpose of advertising the facility as well as any product, business or service." Id. at *2, quoting Ord. No. 7757, § 7-1. In its complaint, plaintiff alleged that the "sports facility" exception "impermissibly discriminates between speech based on the content of the speech and the identity of the speaker" in violation of the First and Fourteenth Amendments to the United States Constitution. (Plf. Compl. at 4-5, ¶¶ 19-22). The district court rejected this argument. After upholding the constitutional validity of the Irving sign ordinance under the Central Hudson test, as interpreted by Metromedia, the court summarily disposed of plaintiff's First Amendment discrimination claim as "unsubstantiated by the evidence." Paradigm, 2002 WL 1776922 at *7 n. 9.
The City of Irving has two existing sports facilities — Texas Stadium and Irving Stadium. There are three advertising structures at Texas Stadium. No advertising structures exist at Irving Stadium. Paradigm, 2002 WL 1776922 at *2.
The district court held that defendant had a "substantial interest" in traffic safety, preventing visual clutter along the streets and highways, and improving the image of the city — the stated purposes of the sign ordinance. Paradigm, 2002 WL 1776922 at *5-6. The court also determined that the ordinance directly advanced those interests and reached no further than necessary to accomplish the stated goals. Id. at *6-7. In rejecting plaintiff's claim that the ordinance was not narrowly tailored to serve a substantial government interest, the court reasoned:
[O]utdoor advertising is allowed in three circumstances under the City's sign ordinance: (1) onsite monument and pole signs; (2) on billboards and advertising structures that pre-existed the ban adopted on June 3, 1999; and (3) prospectively, on advertising structures at sports facilities. [Citations omitted]. These opportunities for commercial speech through the medium of signs assure that such form of expression is not suppressed, while at the same time the prohibition on new billboards effectively advances the City's aesthetic objectives.
Id. at *7.
Although defendant ultimately prevailed on summary judgment, there is nothing in the record from which to conclude that plaintiffs constitutional challenge to the sign ordinance was "frivolous, unreasonable, or without foundation." Christiansburg, 98 S.Ct. at 700. See also Barber v. Municipality of Anchorage, 776 P.2d 1035, 1040-41 (Alaska 1989), cert. denied, 100 S.Ct. 287 (1989) (declining to award attorney's fees to prevailing defendant in case challenging validity of sign ordinance under First and Fourteenth Amendments). To the contrary, plaintiff presented a colorable claim that the Irving sign ordinance discriminated against speech based on the content of the message and the identity of the speaker. Numerous Supreme Court cases support such a cause of action. See Rosenberger v. Rector and Visitors of Univ. of Virginia, 515 U.S. 819, 828, 115 S.Ct. 2510, 2516, 132 L.Ed.2d 700 (1995); Regan v. Time, Inc., 468 U.S. 641, 648-49, 104 S.Ct. 3262, 3266-67, 82 L.Ed.2d 487 (1984); Police Dep't of Chicago v. Mosley, 408 U.S. 92, 95-96, 92 S.Ct. 2286, 2290-91, 33 L.Ed.2d 212 (1972), cited in Plf. MSJ at 10. Even defense counsel acknowledges that the "theory of relief advanced by Plaintiffs was predicated on recent United States Supreme Court opinions, and was supported by extensive briefing by a highly reputable firm that specializes in First Amendment claims." (Def. Mot. for Atty. Fees, Exh. 1 at 4, ¶ 8). Counsel states that "[a] high skill level was required to defend against these statutory and constitutional challenges to the City's sign ordinance[,]" including numerous depositions, full written discovery, and extensive research. ( Id.). Surely this amount of legal work, for which defendant seeks more than $80,000 in attorney's fees, would not have been necessary had plaintiff failed to establish a prima facie case. See also Ackerly Communications of Massachusetts, Inc. v. City of Somerville, 901 F.2d 170, 172 (1st Cir. 1990) (recognizing inherent difficulty of legal issues in case challenging sign ordinance on First Amendment grounds).
Nor is an award of attorney's fees justified merely because defendant never made a settlement offer and the case was dismissed before trial. As the Fifth Circuit has noted, "[w]hether a municipality offers to settle simply seems less indicative of the weakness of a plaintiffs case than whether a private employer offers to settle." Myers, 211 F.3d at 292 n. 3 (questioning value of this factor in section 1983 cases). Moreover, the constitutional issues made the basis of this suit were resolved on cross-motions for summary judgment. This suggests that neither side contemplated that a trial would be necessary.
In sum, an award of attorney's fees in this case "would substantially add to the risks inhering in most litigation and would undercut the efforts of Congress to promote the vigorous enforcement of [the civil rights laws]." Christiansburg, 98 S.Ct. at 701; see also Vaughner v. Pulito, 804 F.2d 873, 878 (5th Cir. 1986). Plaintiff's claims were not frivolous, unreasonable, or without foundation. Consequently, defendant may not recover attorney's fees under 42 U.S.C. § 1988.
RECOMMENDATION
Defendant's motion for attorney's fees should be denied.