A billboard company may not bring a California Environmental Quality Act lawsuit over the City of West Hollywood's amended sign ordinance, the Second District Court of Appeal has ruled.

The Second District upheld a trial court judge, who had determined that Regency Outdoor Advertising was attempting to use CEQA to pursue its commercial interests against competitors.

In 1998, West Hollywood amended its zoning ordinance to permit tall wall signs — illuminated outdoor advertising of at least 5,000 square feet — along Sunset Boulevard to break up the visual monotony of blank walls. The signs were to be allowed where windows were less than 15% of the image area.

Two years later, the city permitted Regency to place a tall wall sign on a building at 9229 Sunset Boulevard. In 2001, however, the city amended its ordinance again. This time the ordinance permitted tall wall signs only if windows covered less than 15% of the wall, not merely the image area. The amendment compelled Regency to remove its sign because windows covered about 25% of the wall.

In 2004, the city proposed reverting to the earlier language regarding "image area," which apparently would permit a new sign on the building at 9229 Sunset. But by that time, Elevation Media and Sunset Sierra Properties had gained the right to place the sign on the building. Regency said the restored language needed review under CEQA. Instead, the city invoked CEQA's "common sense" exemption and adopted the amendment without environmental review, prompting Regency's lawsuit.

Los Angeles County Superior Court Judge David Jaffee tossed out the case based on the precedent set in Waste Management of Alameda County v. County of Alameda, (2000) 79 Cal.App.4th 1223. The Waste Management case was filed by the operator of a landfill (Waste Management) whose proposed acceptance of a particular type of waste was subjected to environmental review by a regional water quality control board. When a competing landfill located only four miles away but within a different water board's jurisdiction was allowed to accept similar waste without undergoing environmental review, Waste Management sued. But the court dismissed the case, concluding the company could not use CEQA simply to advance its commercial and competitive interests (see CP&DR Legal Digest, May 2000).

On appeal, Regency argued that Waste Management did not apply. Regency contended it was suing over an ordinance of general application while Waste Management involved a single permit. Regency cited Dunn-Edwards Corp. v. South Coast Air Quality Management Dist., (1993) 19 Cal.App.4th 519, for support. But the Second District said Dunn-Edwards focused on regulator's response to claims about environmental effects of regulations, and not on standing (a party's ability to bring a lawsuit). "A case is not authority for a proposition it does not address," Justice Laurence Rubin wrote.

Regency argued that while the landfills involved in Waste Management were in two different water boards' jurisdictions, Regency has its main office and billboards in West Hollywood. Therefore, the company has an interest over and above the general public's.

The court agreed the ordinance affects Regency more than it does the general public. "But the amendment does not have environmental effects on Regency that are greater than the effects it has on other businesses and property owners in the city," Rubin wrote.

Regency argued that instead of relying on Waste Management, the court should look to Burrtec Waste Industries, Inc., v. City of Colton, (2002) 97 Cal.App.4th 1133. In Burrtec, the court allowed a company to pursue a CEQA lawsuit concerning a competitor's permit application because it involved the city's failure to follow public notice requirements. The fact that Burrtec Waste Industries could gain an economic advantage did not disqualify the company's suit (see CP&DR Legal Digest, July 2002).

The Second District was unconvinced: "Regency does not allege it lacked notice of the city's proceedings to amend the ordinance. Instead, Regency simply disagrees with the outcome of those proceedings in which it participated."

Regency further argued that it had "citizen standing" under CEQA and, for support, cited four other lawsuits it has pending regarding competing billboard companies' compliance with CEQA. That argument played badly at the trial court, where Jaffee concluded it was further evidence of Regency's use of CEQA for economic purposes.

"To dispel the aura of self-interest masquerading as environmentalism, some evidence is likely to exist of a party's engagement in environmental issues where it had nothing to gain financially," Justice Rubin wrote. "The trial court found Regency's gaggle of lawsuits was not such evidence."

The Case:
Regency Outdoor Advertising, Inc. v. City of West Hollywood, No. B18611, 07 C.D.O.S. 8870, 2007 DJDAR 11348. Filed July 25, 2007.
The Lawyers:
For Regency: Michael Tidus, Jackson, Demarco, Tidus & Peckenpaugh, (949) 752-8585.
For the city: Michael Jenkins, Jenkins & Hogin, (310) 643-8448.
For Elevation Media and Sunset Sierra Properties: Gary Mobley, (949) 955-1010.