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July 7, 1998

GAUDIYA VAISHNAVA SOCIETY, a California Nonprofit, Religious Corporation, and CULTURAL MEDIA SERVICES, a California Nonprofit Corporation, dba ECO WATCH, Plaintiffs,
CITY OF MONTEREY, a California Municipal Corporation, and CITY OF SANTA CRUZ, a California Municipal Corporation, Defendants.

The opinion of the court was delivered by: MCCURN


Plaintiffs Gaudiya Vaishnava Society ("GVS") and Cultural Media Services, doing business as Eco Watch ("Eco Watch"), commenced this action seeking declaratory and injunctive relief prohibiting defendants, the City of Monterey, California ("Monterey") and the City of Santa Cruz, California ("Santa Cruz"), from enforcing their respective ordinances, Monterey City Code section 32-3 (the "Monterey ordinance") and Santa Cruz Municipal Code section 5.43.025 (the "Santa Cruz ordinance"). Plaintiffs contend that the ordinances are unconstitutional on their face and as applied to them because they infringe upon their First Amendment rights by prohibiting the distribution of message-bearing T-shirts in exchange for donations anywhere in Monterey and along the waterfront area in Santa Cruz. Essentially, GVS challenges the Monterey ordinance while Eco Watch challenges the Santa Cruz ordinance.

 At the outset, plaintiffs applied for a temporary restraining order and preliminary injunction prohibiting defendants from enforcing their respective ordinances. The court denied the TRO application and directed defendants to show cause why the court should not issue a preliminary injunction prohibiting the enforcement of the ordinances pending a trial on the merits. See Order Denying Application for Temporary Restraining Order and Order to Show Cause, July 7, 1997 (Whyte, J.), Docket Document Number ("Dkt. No.") 12. Thereafter, the court denied plaintiffs' motion for a preliminary injunction on the basis that "plaintiffs have not shown a likelihood of success on the merits" in that the ordinances "appear to be content neutral, narrowly tailored to serve substantial government interests, and leave ample alternative channels of communication." See Order Denying Plaintiffs' Motion for Preliminary Injunction, August 18, 1997 (Whyte, J.), Dkt. No. 32.

 The matter was then set down for trial which was held February 23, 1998 through February 26, 1998 in San Jose, California. The parties presented evidence through the testimony of witnesses and the introduction of numerous exhibits. Additionally, on February 27, 1998 the court, along with the parties, visited both Monterey and Santa Cruz to observe first-hand the areas discussed during the trial. At trial, plaintiffs sought a permanent injunction prohibiting the defendants from enforcing their respective ordinances and a declaration from the court that the ordinances each violated the First and Fourteenth Amendments to the United States Constitution and Article I, section 2 of the Liberty of Speech Clause of the California Constitution. At the conclusion of plaintiffs' case, Monterey moved pursuant to Rule 52(c) of the Federal Rules of Civil Procedure for judgment on its behalf on the basis that GVS lacked standing to challenge Monterey's ordinance. The court reserved on Monterey's motion and now finds, as discussed herein, that GVS, as well as Eco Watch, has standing to maintain this action. In accordance with Rule 52(a) of the Federal Rules of Civil Procedure, the following constitutes the court's decision in this matter and comprises the court's findings of fact and conclusions of law. For the reasons that follow, the court denies plaintiffs' demand for declaratory and injunctive relief and dismisses the complaint against both defendants.


 GVS, a branch of the Krishna Consciousness religious organization, and Eco Watch, an environmental preservation organization, are non-profit organizations that seek the right to continue their activities of distributing message-bearing T-shirts in exchange for requested donations. Both GVS and Eco Watch display and distribute their T-shirts in order to spread their messages as widely as possible, as well as to raise funds for their causes. Eco Watch concedes that its primary source of funds is the distribution of T-shirts in exchange for donations.

 Between February 1995 and September 1996, GVS distributed its message-bearing T-shirts in exchange for donations in Monterey. Specifically, GVS conducted its activities adjacent to the wharf-- between the Maritime Museum and Monterey's Recreation Trail-- in an area referred to as the "free-speech" area. Between April 1994 and April 1996, Eco Watch distributed its message-bearing T-shirts on public sidewalks and walkways along the waterfront area in Santa Cruz.

 Since 1936, Monterey has generally prohibited the use of public property for the private sale of merchandise pursuant to a city ordinance. The current form of the Monterey ordinance, in existence since 1985, provides as follows:

No person shall use or employ any portion of any public street, lane, alley, park, mall, plaza or any other public property for the conducting or transaction of any private commercial business or activity. This section shall not apply to concessions granted by or to lands leased by the City of Monterey.

 See Defendant Monterey's Exhibit ("Monterey Exh.") "5" (Monterey ordinance).

 In response to requests from non-profit groups, Monterey set up a free-speech area in March 1995 and permitted non-profit groups to sell or exchange for donations message-bearing T-shirts and to conduct other related First Amendment activities. E.g., Monterey Exh. "6" (city council minutes of March 21, 1995 meeting that created free-speech area); Plaintiffs' Exhibit ("Pl. Exh.") "K" (February 1995 letter from city attorney to plaintiffs' attorney advising that Monterey will allow T-shirt sales in free-speech area). It is clear that Monterey did not embrace the notion of setting up the free-speech area for the sale or exchange of T-shirts, but rather, created it to avoid litigation with groups that wanted to distribute their message-bearing merchandise. See Monterey Exh. "6" (city council minutes reciting that the "City Attorney said Federal Court decisions have mandated this action" and it is "not City policy, but a Federal Court Mandate").

 Monterey's primary source of income is derived from tourism. As a result, a significant resource of Monterey is its well-known reputation as a premier tourist destination and meeting town. In furtherance of maintaining and enhancing its reputation and protecting its economic viability, Monterey is particularly concerned with its public safety, its aesthetics and historic appeal, and the protection of its local merchant economy.

 Regarding public safety, the director of public facilities for Monterey, Carl E. Anderson, testified that sidewalk vending creates a dangerous situation because there is insufficient space in the public areas such as the walkways to accommodate both vendors and pedestrians. This leads to dangerous situations such as the spillover of pedestrian traffic into the roadways. Monterey contends that while this problem is city-wide, it is particularly significant in heavily traveled areas such as the free-speech area, the wharf, downtown, and Cannery Row. *fn1" In the free-speech area, congestion is heavy because this is a focal point near the wharf where many walkways, including the Recreation Trail, converge, as well as the area where tour buses unload passengers. *fn2" Similarly, in the downtown section of Monterey, many sidewalks are irregular and vary in width, which likewise contributes to the congestion problems.

 Monterey also contends that the cluttered open market appearance created by sidewalk vending detracts from its efforts to maintain its aesthetic appeal. See, e.g., Monterey Exh. "8." (picture depicting non-profit groups distributing T-shirts in free-speech area). Anderson testified that he received numerous complaints about the free-speech area because the T-shirt tables blocked the view of Monterey Bay from inside the Maritime Museum, which is designed with windows that allow those inside to take advantage of an existing scenic easement to view the bay. Anderson also received complaints that sidewalk vending added visual clutter to the area outside the museum.

 In addition to the congestion of pedestrian traffic and the obstruction of views, Anderson also relayed that local merchants vigorously complained about the T-shirt sidewalk vendors. The substance of these complaints was that the vendors unfairly competed with merchants because they were not subject to taxes or regulation and therefore could distribute their T-shirts and wares in exchange for significantly less money than local merchants could sell them.

 Monterey maintained its free-speech area until August 1996, at which time it rescinded its decision to allow non-profit groups to distribute their T-shirts and other merchandise. See Monterey Exh. "7" (city council minutes of August 6, 1996 meeting rescinding free-speech area); Pl. Exh. "N" (August 1996 letter from city attorney to all free-speech area permit holders that the city council "voted to eliminate the 'Free-Speech' sales area."). Monterey rescinded its free-speech area in reliance on the Ninth Circuit's decision in One World One Family Now v. City and County of Honolulu, 76 F.3d 1009 (9th Cir.), cert. denied, 136 L. Ed. 2d 403, 117 S. Ct. 554 (1996), which, Monterey contends, paved the way for cities to prohibit sidewalk commerce without violating the First Amendment if the prohibition serves legitimate governmental interests, is content neutral, is narrowly tailored, and leaves open ample alternative channels of communication. Monterey notified the non-profit groups using the free-speech area that they could no longer continue distributing T-Shirts or other merchandise for donations in the free-speech area because the Monterey ordinance prohibited the sale of any merchandise on public property. See Pl. Exh. "N."

 The Monterey ordinance has not been enforced nor has enforcement been threatened against GVS or any of its members. However, in accordance with Monterey's mandate, GVS, as well as other non-profit groups, has refrained from distributing its T-shirts in the free-speech area or anywhere else in Monterey. Ronald Hebner, a member of GVS and the person designated by GVS to oversee its operations in Monterey, testified that GVS has definitive plans to recommence its activities if the Monterey ordinance is found invalid.

 With regard to Santa Cruz, the evidence demonstrated that in early 1980 Santa Cruz began a redevelopment and planning process to capitalize on its reputation as one of the premier family tourist attractions in Northern California. Santa Cruz considers the waterfront area, which includes its beaches, the boardwalk amusement park, and its municipal wharf, critical to its economic stability because it generates revenues from taxes and provides employment for its residents. See Santa Cruz Exh. "2" (map delineating waterfront area). Santa Cruz receives millions of tourists a year generating approximately $ 400 million in revenue from its tourist industry. See, e.g., Santa Cruz Exh. "9" (news accounts of Santa Cruz' tourist industry).

 In connection with Santa Cruz' redevelopment process, the city adopted the "Santa Cruz Beach Area Plan," in July 1980. See Santa Cruz Exh. "3" (resolution adopting Plan) and "4" (excerpts of Plan). The Beach Area Plan stressed the significance of pedestrian traffic flow and maintaining a more aesthetically pleasant waterfront area. See id. (Planning Issues at 65; Policy Statements at 67) In 1991, Santa Cruz adopted its "Beach Street Promenade Design Plan" which reiterated the need to improve pedestrian traffic flow and to maintain the aesthetics of the waterfront area. See Santa Cruz Exh. "5" (city council resolution adopting Plan and the Beach Street Promenade Design Plan) (the 1980 Beach Area Plan and the 1991 Beach Street Promenade Design Plan are collectively referred to as the "Plans"). The theory behind improving pedestrian traffic flow and the aesthetics of the area was that it would increase tourism and allow the local tourist-based economy to prosper. See Santa Cruz Exh. "4" and "5."

 According to the Plans and the Redevelopment Manager for Santa Cruz, Joseph Hall, the walkways along the waterfront were designed exclusively for pedestrian use. See id. Hall testified that these Plans were developed, in large part, through a public participation process, which included public meetings. Through this process, the public conveyed its desire for the waterfront area and, in particular, the walkways, to be as open as possible to allow pedestrians to stroll along the waterfront as well as observe the bay and beach activities. Santa Cruz incorporated the public's suggestions and desires into the Plans. See id.

 In approximately the summer of 1992, non-profit groups, including Eco Watch, began distributing their message-bearing wares in exchange for donations. While the majority of groups distributed message-bearing T-shirts in exchange for donations, other groups distributed various items such as jewelry and food as well as ...

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