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NAPA VALLEY PUBLISHING CO. v. CITY OF CALISTOGA

September 6, 2002

NAPA VALLEY PUBLISHING COMPANY, PLAINTIFF,
V.
CITY OF CALISTOGA, DEFENDANT.



The opinion of the court was delivered by: Edward M. Chen, United States Magistrate Judge

 
ORDER GRANTING IN PART AND DENYING IN PART NAPA VALLEY PUBLISHING COMPANY'S MOTION FOR A PRELIMINARY INJUNCTION (No. 11)

The City of Calistoga (hereinafter the "City") is a historic town in the Napa Valley known for its tourism. The City is home to a number of day spas, visitor accommodations, restaurants and retail shops, etc. On February 6, 2001, the City, due in part to the growing sentiment of the City's merchants and citizens who felt that the newsracks affected the aesthetics and pedestrian safety of the City, in 2001, enacted Ordinance No. 570, codified as § 12.34 of the City's Municipal Code (hereinafter the "Ordinance"), regulating newsracks. The City adopted the Ordinance "to promote the public health, safety and welfare through the regulation of placement, appearance, number, size and servicing of newsracks on the public rights-of-way." Calistoga Muni. Code § 12.34.050(A).

The Ordinance limits the maximum number of newsracks which may be located on a city block to eight. In three locations, the Ordinance provides an exception to this rule, allowing up to twelve, and in one location up to sixteen. Where there are two or more newsracks in any one location, the newsracks must be housed in a pedestal-mounted modular newsrack. A modular or cluster newsrack is one with two rows of compartments into which individual newsracks can be installed. Each module can accommodate from four to eight newsracks. The Ordinance also requires that newsracks, including modular newsracks, cannot be placed within two hundred feet of one another on the same city block.

Additionally, the Ordinance requires publishers to obtain encroachment and newsrack permits prior to the installation of any newsrack. And where the City receives more permit applications than permitted at a particular location, the Ordinance provides for the City to conduct a random lottery to allot the available newsrack spaces within the pedestal-mounted newsrack.

In March 2001, no lottery was held because the publishing companies who had previously distributed their publication in the City prior to the Ordinance's enactment were able to divide the available newsracks amongst themselves.

Sometime after the initial installation of the pedestal-mounted newsracks in 2001 and April 17, 2002, other publications applied for newsrack permits under the Ordinance at locations that had already reached the applicable newsrack limit. Because demand exceeded supply, the City conducted its first newsrack lottery in 2002.*fn1

On July 2, 2002, NVP filed a complaint against the City alleging violations of NVP's: [1] First and Fourteenth Amendment rights; [2] Due Process rights; [3] rights under the Equal Protection Clause; and [4] rights under the California Constitution.*fn3

Thereafter, on July 17, 2002, the City notified NVP for a second time that it was required to remove its publications.

NVP appealed the City's notice of removal to the Calistoga City Council. On July 31, 2002, the City denied NVP's administrative appeal and ordered NVP to remove its publications within ten days (on or before August 10, 2002).

On August 8, 2002, NVP filed a motion for a temporary restraining order and preliminary injunction before the Court asserting as it primary basis NVP's First Amendment Claim. On August 9, 2002, due to this Court's unavailability, a hearing on the motion for temporary restraining order was held before the Honorable Charles R. Breyer. The District Court issued the temporary restraining order maintaining the status quo.

Additional briefs and evidentiary material were submitted by both parties and a hearing on the motion for a preliminary injunction was held on August 21, 2002, and taken under submission.

Having reviewed the briefs and accompanying evidentiary submissions filed by counsel and the record in this case, as well as having considered the oral argument of counsel on August 21, 2002, the Court makes the following determinations.

ANALYSIS

A. Legal Standard

A preliminary injunction is a provisional remedy, the purpose of which is to preserve status quo and to prevent irreparable loss of rights prior to final disposition of the litigation. Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984). The trial court may grant a temporary restraining order or preliminary injunction in the exercise of its equitable powers. Fed R. Civ. P. 65. It does so in the exercise of its discretion. See Schneider v. California Department of Corrections, 91 F. Supp.2d 1316, 1327 (N.D.Cal. 2000), citing, Big Country Foods, Inc. v. Board of Educ. of Anchorage School Dist., 868 F.2d 1085, 1087 (9th Cir. 1989). Generally, to obtain preliminary injunctive relief, a moving party must show a threat of irreparable injury and the inadequacy of legal remedies, the conventional requisites for equitable relief. See Arcamuzi v. Continental Air Lines, Inc., 819 F.2d 935, 937 (9th Cir. 1987); Easyriders Freedom F.I.G.H.T. v. Hannigan, 92 F.3d 1486, 1495 (9th Cir. 1996).

In addition, the issuance of preliminary injunctive relief rests upon consideration of four factors: [1] the likelihood of the plaintiffs' success on the merits; [2] the threat of irreparable harm to the plaintiffs if the injunction is not imposed; [3] the relative balance of this harm to the plaintiffs and the harm to the defendants if the injunction is imposed; and [4] the public interest. Los Angeles Memorial Coliseum Commission v. National Football League, 634 F.2d 1197, 1200-01 (9th Cir. 1980).

The Ninth Circuit has encompassed these factors into a two-prong test. To qualify for preliminary injunctive relief, the moving party must show "`either [1] a likelihood of success on the merits and the possibility of irreparable injury, or [2] that serious questions going to the merits were raised and the balance of hardships tips sharply in [the moving party's] favor.'" Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1119 (9th Cir. 1999), quoting, Sega Enterprises, Ltd. v.

Accolade, Inc., 977 F.2d 1510, 1517 (9th Cir. 1992). See Schneider, 91 F. Supp.2d at 1327. "These two formulations represent a continuum in which the required degree of irreparable harm increases as the probability of success decreases." America West Airlines, Inc. v. National Mediation Board, 119 F.3d 772, 777 (9th Cir. 1997) (internal quotations omitted). See Sun Microsystems, 188 F.3d at 1119 (noting that the greater the moving party's relative hardship, the less probability of success must be shown); Schneider, 91 F. Supp.2d at 1327 ("These are not two distinct tests, but rather the opposite ends of a single continuum in which the required showing of harm varies inversely with the required showing of meritoriousness." (internal quotations omitted)). When an injunction would affect the public, the court must examine whether the public interest would be advanced or impaired by the issuance of a preliminary injunction. Caribbean Marine Services Co. v. Baldridge, 844 F.2d 668, 674 (9th Cir. 1988).

1. Irreparable injury

The City initially argues that NVP cannot establish irreparable injury, if it is unable to show a likelihood of success on the merits. The City argues that if there is only a showing of serious questions on the merits, the threat to First Amendment rights is insufficient to permit injunctive relief.

The argument is meritless. It collapses two concepts. Inquiry into irreparable injury is separate and distinct from inquiry into the merits. The issue with respect to irreparable injury is whether, if the preliminary injunction is denied, the plaintiff can be made whole should it prove victorious at trial, i.e., whether the loss or deprivation pending trial is reparable. The loss of money is the classic example of an interim loss that is fully remediable after trial. L.A. Coliseum, 634 F.2d at 1202 (irreparable harm not present where losses can be compensated by money damages). On the other hand, certain interim injuries such as an injury to the environment or to a copyright, become irretrievable once incurred and are not fully remediable. See, e.g., Amoco Production Co. v. Village of Gambell, 480 U.S. 531, 545 (1987) (environmental injury); Cadence Design Systems, Inc. v. Avant! Corp., 125 F.3d 824, 827 (9th Cir. 1997) (presumption of irreparable harm in copyright infringement cases), cert. denied, 523 U.S. 1118 (1997). Irreparability of injury pending trial turns on the nature of the loss and the ability of the court to make the plaintiff whole after the trial; it does not necessarily turn on the meritoriousness of the plaintiff's legal claim.

In this case, the loss threatened is the restriction on distribution of NVP's publications which would result from enforcement of the Ordinance and the April 17, 2002 lottery. NVP has proffered evidence it would lose significant readership if the challenged restrictions were implemented pending trial. Restrictions which impede speech inflict an immediate loss in the opportunity to speak (or in this case, the opportunity to disseminate NVP's speech through its publications). That loss is especially significant (and irremediable) for a periodic publication whose publication loses value with each passing period. That lost opportunity to disseminate time sensitive speech cannot be remedied after trial. Preventing injury that cannot later be repaired is precisely the kind of irreparable injury that warrants preliminary injunctive relief. See S.O.C., Inc. v. County of Clark, 152 F.3d 1136, 1148 (9th Cir. 1998) (finding irreparable injury where ordinance imposed unreasonable time, place and manner restriction on protected speech), quoting, Elrod v. Burns, 427 U.S. 347, 373 (1976) ("the loss of First Amendment freedoms for even minimal periods of time unquestionably constitutes irreparable injury"); Foti v. City of Menlo Park, 146 F.3d 629, 643 (9th Cir. 1998) (same); One World One Family Now, Inc. v. State of Nevada, 860 F. Supp. 1457, 1464 (D. Nev. 1994) (finding irreparable injury where charitable nonprofit organizations were precluded from selling message-bearing t-shirts using portable tables and signs on the Las Vegas Strip).

Furthermore, in addition to the lost opportunity to disseminate time-sensitive speech, if the challenged impingement on speech violates the First Amendment, the plaintiff also suffers the loss of a constitutionally-protected legal right. Violation of a constitutional right in, and of itself, constitutes irreparable injury. See Topanga Press, Inc. v. City of Los Angeles, 989 F.2d 1524, 1528-29 (9th Cir. 1993) (constitutional rights), cert. denied, 511 U.S. 1030 (1994); Chalk v. United States District Court, 840 F.2d 701, 710 (9th Cir. 1988) (civil rights); Zepeda v. United States Immigration and Naturalization Service, 753 F.2d 719, 727 (9th Cir. 1983) (constitutional rights). While this aspect of harm is related to the meritoriousness of a plaintiff's claim, even where the plaintiff has not demonstrated it is likely to prevail but instead establishes serious questions on the merits, it thereby establishes a distinct possibility that its constitutional rights would be violated absent the preliminary injunction. Sammartano v. First Judicial District Court in, for County of Carson City, — F.3d — , 2002 WL 1963341, *13 (9th Cir. 2002) ("[E]ven if the merits of the constitutional claim were not clearly established at this early stage in the litigation, the fact that a case raises serious First Amendment questions compels a finding that there exists the potential for irreparable injury." (Internal quotations omitted)). Irreparable injury need not be established with certainty or even high probability; the distant possibility of such harm establishes a "serious threat of irreparable injury" sufficient to support preliminary injunctive relief. See, e.g., id.; Foti, 146 F.3d at 643; Burkow v. City of Los Angeles, 119 F. Supp.2d 1076, 1082 (C.D.Cal. 2000).

2. The balance of hardships

NVP asserts that with respect to that prong of the preliminary injunction test involving "serious questions going to the merits," where First Amendment rights are at issue, it need only show the balance of hardships tips in its favor, not that the balance tips "sharply" in its favor. NVP cites to Foti v. City of Menlo Park, supra, for this proposition. However, the Court is not convinced that Foti establishes a new and different standard for preliminary injunctive relief. While Foti omits the term "sharply" in its description of the balance of hardships, the omission is insignificant. Telling is Foti's citation to Gilder v. PGA Tour, Inc., 936 F.2d 417, 422 (9th Cir. 1991). Gilder states that "`[t]he critical element in determining the test to be applied is the relative hardship to the parties. If the balance of harms tips decidedly toward the plaintiff, then the plaintiff need not show as robust a likelihood of success on the merits as when the balance tips less decidedly.'" Gilder, 936 F.2d at 422 (emphasis added), quoting, Benda v. Grand Lodge of Int'l Ass'n of Machinists & Aerospace Workers, 584 F.2d 308, 315 (9th Cir. 1978), cert. dismissed, 441 U.S. 937 (1979). The Court sees no significance between the terms "decidedly" and "sharply" and refuses to impute to the Ninth Circuit on such a bare thread, an intent to modify the general test applicable to preliminary injunctions. Additionally, the Court notes post Foti, numerous trial courts have applied the traditional test for a preliminary injunction in First Amendment cases, requiring that the hardships tip "sharply" in favor of the plaintiffs where the plaintiffs only establish serious questions on the merits. See, e.g., City of Thousand Oaks v. Verizon Media, No. CV 02-2553, 2002 WL 987910, *4 (C.D.Cal. May 15, 2002); Mardi Gras of San Luis Obispo v. City of San Luis Obispo, 189 F. Supp.2d 1018, 1025 (C.D.Cal. 2002); San Jose Christian College v. City of Morgan Hill, No. C 91-20857, 2001 WL 1862224, *1 (N.D.Cal. Nov. 14, 2001); Eller Media Co. v. City of Oakland, No. C 98-2237, 1998 WL 549494, *3 (N.D.Cal. Aug 28, 1998).

As noted above, the First Amendment interest may well inform the calculus in the balance of hardships, but it does not change the applicable standard.

Accordingly, the Court examines the merits of NVP's legal challenges to the Ordinance and the respective balance of hardships under the traditional test applicable in this Circuit.

B. Legal Challenges to the Ordinance

At the outset, it is undisputed that NVP's right to sell The Napa Valley Register and distribute other publications in newsracks with the city limits of Calistoga is constitutionally protected by the First Amendment. See Gannett Satellite Info. Network v. Metropolitan Transportation Authority, 745 F.2d 767, 772 (2d Cir. 1984). The First Amendment, however, "does not guarantee the right to communicate one's views at all times and places or in any manner that may be desired," Heffron v. Int'l Soc'y for Krishna Consciousness, Inc., 452 U.S. 640, 647 (1981), and under certain circumstances, a municipality may impose reasonable time, place and manner restrictions on the exercise of First Amendment rights. The municipality possesses the burden, however, as the City concedes, of proving the constitutionality of the Ordinance. See United States v. Playboy Entertainment Group, Inc., 529 U.S. 803, 816 (2000) ("When the Government restricts speech, the Government bears the burden of proving the constitutionality of its actions.").

Here, NVP bases its motion for a preliminary injunction on two challenges to the Ordinance. First, it contends that the Ordinance grants excessive discretion to the City to grant or deny the permits required for the installation and use of newsracks. Second, NVP challenges the numerical limits on newsracks permitted and the allocation of resulting scarcity by annual lottery as an invalid time, place and manner restriction on speech.

1. Statute of Limitations

As a threshold question, the City argues that NVP is precluded from challenging the Ordinance due to the one-year statute of limitation which runs from the time the Ordinance was passed (February 6, 2001). For this proposition, the City cites Acuna v. The Regents of the University of California, 56 Cal.App.4th 639, 645-46 (1997) (determining that an one year statute of limitations applied to a wrongful termination action where the university allegedly terminated a professor based on his political views). However, Acuna involves an "as-applied" challenge as opposed to a facial challenge to legislation.*fn4

In this case, NVP purports to challenge the Ordinance on its face. The statute of limitations does not apply to the facial challenge of a statute that infringes First Amendment freedoms as such as statute inflicts a continuing harm. See 3570 East Foothill Blvd., Inc. v. City of Pasadena, 912 F. Supp. 1268, 1278 (C.D.Cal. 1996) (noting that such a challenge is different in a takings context because there the very enactment of the statute inflicts harm); Santa Fe Springs Realty Corp. v. City of Westminster, 906 F. Supp. 1341, 1364-65 (C.D.Cal. 1995) ("Because strong policy reasons militate in favor of permitting facial challenges to statutes that impinge upon protected First Amendment rights, the statute of limitations should not preclude a plaintiff from bringing a facial challenge more than one year after the statute is enacted."). See also National Advertising Co. v. City of Raleigh, 947 F.2d 1158, 1168 (4th Cir 1991), cert. denied, 504 U.S. 931 (1992). Moreover, even if the City's statute of limitations defense applied to those aspects of NVP's claims which might be construed as an as-applied challenge to the Ordinance, the statute of limitations defense begins to run as of the date of the challenged application, e.g., when the party seeks and is denied a permit under the statute. See Gilbert v. City of Cambridge, 745 F. Supp. 42, 49 (D.Mass. 1990), aff'd, 932 F.2d 51 (1st Cir. 1991), cert. denied, 502 U.S. 866 (1991). In the case at bar, the City's denial of NVP's newsrack locations based on the results of the April 17, 2002 lottery is within a year of this suit.

Thus, at this juncture, the City has not demonstrated that this suit is likely barred.*fn5

2. The City's unbridled discretion in the issuance of permits under the Ordinance

a. Merits

Where a city vests unbridled discretion in the hands of a government official or agency in issuing a permit for speech, it imposes a prior restraint. City of Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 757 (1988). See S.E. Promotions, Ltd. v. Conrad, 420 U.S. 546, 552-53 (1975) (stating that a prior restraint is found where a party must apply to a government body prior to its exercise of its First Amendment rights for a permit). A prior ...


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