A City of Los Angeles ban on certain outdoor advertisements has been upheld by the Ninth U.S. Circuit Court of Appeals. In World Wide Rush, LLC, v. City of Los Angeles the unanimous three-judge appellate panel overturned a lower court ruling in favor of companies seeking to prevent the enforcement of the signage ban.

Despite its deep connections to both the media and car culture, the City of Los Angeles generally prohibits several classes of advertisements that encroach on the public realm: billboards that face a freeway, supergraphics (massive images that cover the sides of tall buildings), and conventional off-site billboards. However, the city has adopted a few exceptions to the prohibitions. For instance, it permits all three classes of advertisement in areas where specific plans are adopted to govern such signs or where the signs are permitted by development agreements. Advertisers have, however, been happy to push the limits of these restrictions, and for years, the city has battled advertising companies over disputed signs – many of which are clearly illegal and yet remain standing.

In 2009 the Ninth Circuit upheld the city's off-site sign restrictions, ruling that they did not unconstitutional favor some speech over other speech (Metro Lights, LLC v. City of Los Angeles, 551 F3d 898; see CP&DR Legal Digest, February 2009). More recently, the city has battled with companies that have erected supergraphics and other lighted signs visible from freeways all over the city. In 2008, the Los Angeles City Council adopted a ban on new supergraphics and off-site signs.

The advertising companies in World Wide Rush sued the city to block enforcement of the sign bans. The companies argued that the freeway-facing sign ban was unconstitutional because it restricted commercial speech. This approach was unconstitutional, the companies argued, because the city had permitted some freeway-facing signs despite the ban, such as electronic signs next to Staples Center in downtown. The plaintiffs argued the supergraphic and off-site sign bans were unconstitutional on their face because exceptions provided by specific plans and development agreements gave the City Council direction to favor certain speech. The favoritism, they argued, was an unconstitutional "prior restraint" of free speech.

District Court Judge Audrey Collins ruled for the advertising companies and enjoined the city from enforcing the bans. The Ninth Circuit reversed Collins.

The Ninth Circuit first addressed the freeway-facing sign ban, which the city approved to limit motorist distractions and improve aesthetics. The court held that the city's exception to permit the billboards next to Staples Center and in a 15th Street special use district did not undermine the city's interests in aesthetics and safety. Instead, the court concluded the city's exceptions were reasonable in light of the benefits of redevelopment of a blighted area and a deal to get rid of billboards elsewhere in the city, thus creating a net loss of such advertisements.

Because this case revolves around restrictions on commercial speech, the Central Hudson case applies. In Central Hudson, the Supreme Court applied a four-part test to determine the constitutionality of a restriction on commercial speech. In applying the test to this case, the Ninth Circuit court framed the question as follows: Do the ban exemptions granted by the city contradict the city's argument that it has a substantial interest in regulating billboards for the safety of its citizens and the beauty of the city? Holding that the ban exemptions did not undermine the city's substantial interests in safety and aesthetics, the court reasoned that allowing the freeway signs near Staples Center was a key part of eliminating blight in the area, and that permitting the sign district on 15th Street – in exchange for removing signs on Santa Monica Boulevard – actually resulted in the elimination of multiple existing billboards along Santa Monica Boulevard.

"The city reasonably may have concluded that, on balance, safer and more attractive thoroughfares would result from renovations to Santa Monica Boulevard and a reduction in the city's total number of billboards, even if this required installation of some freeway-facing billboards along 15th Street," Judge Kim McLane Wardlaw wrote for the court. "The city also reasonably may have concluded that the benefits of redeveloping and attracting people to an otherwise dangerous and blighted downtown area outweighed the harm of additional freeway-facing billboards restricted to that area."

In addressing the second issue – whether the city could employ various exceptions in the ordinance banning supergraphic and off-site billboards – the Ninth Circuit held that the city was well within its discretion to grant exemptions to the ordinance, as the prior restraint doctrine did not apply. The court reasoned that because the City Council's power to authorize the exceptions to the sign bans arises out of the police power – and not from the bans themselves – the City Council had the authority to exercise discretion.

The Case:

World Wide Rush, LLC, v. City of Los Angeles, No. 08-56454, 2010 DJDAR 7787. Filed May 26, 2010.

The Lawyers:
For World Wide Rush: Rex E. Heinke, Akin, Gump, Strauss, Hauer & Feld, (310) 229-1030.

 For the city: Kenneth T. Fong, city attorney's office, (213) 978-8235.

CP&DR's Legal Digest is produced in partnership with Abbott & Kindermann LLP.