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Paramount Contractors and Developers, Inc., et al v. City of Los Angeles

January 28, 2011

PARAMOUNT CONTRACTORS AND DEVELOPERS, INC., ET AL., PLAINTIFFS,
v.
CITY OF LOS ANGELES, A CALIFORNIA MUNICIPAL CORPORATION, COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, DEFENDANTS.



The opinion of the court was delivered by: Audrey B. Collins Chief United States District Judge

ORDER RE: DEFENDANT COMMUNITY REDEVELOPMENT AGENCY'S MOTION TO DISMISS

Pending before the Court is the Community Redevelopment Agency of the City of Los Angeles's (the "CRA's") motion to dismiss, filed on December 22, 2010. (Docket No. 52.) Plaintiffs Paramount Contractors and Developers, Inc., et al. (collectively "Paramount") opposed on January 14, 2011 and the CRA replied on January 24, 2011. The Court finds this matter appropriate for resolution without oral argument and VACATES the Monday, February 7, 2011 hearing date. For the reasons below, the Court GRANTS the motion and DISMISSES the CRA from this case WITH PREJUDICE.

PROCEDURAL AND FACTUAL BACKGROUND

As one of many billboard companies pursuing litigation in the City of Los Angeles, Paramount wishes to erect and maintain "supergraphic" signs at two locations in Los Angeles: 6464 and 6565 West Sunset Boulevard.*fn1 It has brought two lawsuits to compel the City to allow it to do so, based largely on claimed First Amendment violations. The first suit, Paramount Contractors & Developers, Inc.v. City of Los Angeles, No. CV 07-159 ABC (JWJx) (C.D. Cal. filed on Jan. 1, 2007) ("Paramount I"), was brought against only the City and was resolved by summary judgment in the City's favor on June 6, 2008. Paramount appealed that ruling on June 20, 2008.

The instant case was filed on August 28, 2008, again, only against the City, alleging essentially the same facts and claims as in Paramount I, but alleging also that Paramount applied for sign permits and the City rebuffed those applications without comment. The original complaint in this case mentioned the CRA, but did not name it as a defendant or plead any claims against it:

[T]he City has also created a "Community Redevelopment Agency" ("CRA"), which also has the power to allow certain individuals to escape the complete prohibition on both off-site signs and on supergraphics, generally in exchange for the payment of large amounts of money or other types of consideration. Plaintiff is informed and believes and thereon alleges that, in areas controlled by the CRA, any speaker wishing to construct such a sign must get the approval of the CRA. (Docket No. 1, Compl. ¶ 22.) Paramount named ten "Doe" defendants, alleging that it was ignorant of the "true names and capacities" of those defendants, but that they were legally responsible for damages alleged in the complaint, either directly or as agents of other defendants, and that they approved the complained-of conduct. (Id. ¶¶ 5-7.)

On October 8, 2008, the City moved to either dismiss or stay this case while the appeal in Paramount I was pending; Paramount opposed the motion. The Court ultimately stayed this case, but that stay was based on the resolution of the then-pending appeal of World Wide Rush, LLC v. City of Los Angeles, 606 F.3d 676 (9th Cir. 2010), not on the resolution of Paramount I.

After World Wide Rush was decided on May 26, 2010, the Court lifted the stay in this case and Paramount filed its First Amended Complaint ("FAC") on October 26, 2010. For the first time, Paramount named the CRA as a defendant. It did not allege that the CRA was replacing a previously named "Doe" defendant, but that the CRA was "believed to be a governmental, or pseudo-governmental agency, located in Los Angeles, California." (FAC ¶ 7.) It did name "Does 1 through 20" as defendants, once again alleging that it was unaware of their "true names and capacities," but that it would amend the FAC once they were ascertained. (FAC ¶ 8.)

Paramount alleges in the FAC that, at the time it sought to erect its signs on the Sunset Properties, the CRA operated within the Hollywood Supplemental Use District (the "Hollywood SUD") to approve supergraphic signs if applicants "complied with the 'sign reduction program' or other exceptions outlined in Sections 7 and 9 of the SUD." (FAC ¶ 20.) "The sign reduction program allowed supergraphics to be erected by a permit applicant if certain types and amounts of other signage were removed by the applicant. The types of signage required to be removed in order to enable the permitting of supergraphics were limited to 'legally permitted billboards, solid panel roof signs, or pole signs.'" (Id.) Paramount claims that the sign reduction program had the effect of "favoring large billboard advertising companies that owned existing billboards, roof signs, and pole signs in the Hollywood SUD which could be used as chips to trade for supergraphic permits." (Id.) Moreover, Paramount alleges that an applicant need not participate in the sign reduction program if the CRA approved the proposed supergraphic sign and the agreement with the CRA "contained fee or other revenue provisions that allowed the CRA to improve the visual environment in a redevelopment project area." (FAC ¶ 21.)

Sometime around August 2006, when Paramount applied for supergraphic sign permits from the City, it was told that it would need CRA approval to erect its signs in the Hollywood SUD. (FAC ¶ 23.) The allegations specific to Paramount's interactions with the CRA are found in two paragraphs in the FAC:

24. When Paramount thereafter approached the CRA, the CRA conditioned granting a permit to Paramount on [] receiving a variety of forms of consideration from Paramount including over $1,200,000 in "in lieu" fees and use of the parking facilities at the Sunset Boulevard Properties at night for ten years, which amounted to at least another $1,500,000 in estimated value. The CRA also demanded at least 10 other significant conditions, including a requirement that Paramount agree to allow the CRA to use the fees "at the sole discretion" of the CRA. Similar consideration has not been required from other property owners and advertisers who have been allowed to erect supergraphics in the Hollywood SUD and throughout the city.

25. In January 2007, after Paramount was rebuffed by the CRA, Paramount filed a lawsuit against the City in the Central District of California challenging some of the City's actions with respect to its previous denial of Paramount's attempts to obtain supergraphic permits [Paramount I]. (FAC ¶¶ 24-25.) Although the FAC is silent on any other actions the CRA took against Paramount, Paramount alleges that the CRA allowed other companies to erect signs in the Hollywood SUD at various times from 2008 through 2010. (FAC ¶ 49(a).) The rest of the allegations against the CRA consist of legal conclusions that the CRA violated Paramount's rights on various grounds by rejecting its requests to erect supergraphic signs. (See, e.g., FAC ¶¶ 51, 55, 60, 70, 81.)

Although not entirely clear from the FAC, Paramount appears to allege violations of federal free speech, equal protection, and takings law rights via 42 U.S.C. ยง 1983, and state ...


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