The opinion of the court was delivered by: Audrey B. Collins Chief United States District Judge
ORDER RE: DEFENDANT CITY OF LOS ANGELES'S MOTION TO DISMISS SECOND AMENDED COMPLAINT
Pending before the Court is the City of Los Angeles's (the "City's") Motion to Dismiss Second Amended Complaint ("SAC"), filed on February 28, 2011. (Docket No. 72.) Plaintiffs Paramount Contractors and Developers, Inc., et al. (collectively "Paramount") opposed on March 14, 2011 and the City replied on March 21, 2011. The Court heard oral argument on April 18, 2011. Following argument, the Court stayed this case while an appeal in a related case was pending. (Docket No. 85.) That appeal was dismissed as moot on May 25, 2011, and the parties stipulated to a schedule for supplemental briefing and submitted additional briefs on the impact of that ruling. (Docket Nos. 88, 89, 91, 94.) Notwithstanding that schedule, Paramount filed an unauthorized sur-reply brief on July 27, 2011, which was stricken as improper. (Docket No. 99.) With the extensive briefing from the parties, the Court found that no further oral argument was necessary and vacated the August 1, 2011 hearing date. (Docket No. 95.) For the reasons below, the Court GRANTS the City's motion in its entirety and DISMISSES this case WITH PREJUDICE.
Like many similar companies, Paramount is a "supergraphic" sign company "attempting to salvage litigation to maintain [two] signs in the City, even after the Ninth Circuit has twice in the last two years rebuffed First Amendment challenges to the City's attempts to control sign proliferation throughout the City of Los Angeles." Vanguard Outdoor, LLC v. City of Los Angeles, __ F.3d __, __, 2011 WL 2175891, at *1 (9th Cir. June 3, 2011) (citing World Wide Rush, LLC v. City of Los Angeles, 606 F.3d 676 (9th Cir. 2010) and Metro Lights, LLC v. City of Los Angeles, 551 F.3d 898 (9th Cir. 2009)). Paramount would like to erect and maintain "supergraphic" signs at two locations in Los Angeles: 6464 and 6565 West Sunset Boulevard (the "Sunset Properties"). 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 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, alleging essentially the same facts and claims as in Paramount I, and alleging that, around June 23, 2008, Paramount "submitted applications to the City for the right to maintain supergraphics on the Sunset Properties," but the City "refused to accept the applications or to process them." (Docket No. 1, Compl. ¶ 11.) Paramount filed its FAC on October 26, 2010, attacking almost every aspect of the City's current and former sign regulations. In a lengthy Order, the Court granted in part and denied in part the City's motion to dismiss the FAC, and Paramount filed a Second Amended Complaint ("SAC") to address the infirmities identified by the Court.
In the meantime, the City moved to dismiss the appeal in Paramount I as moot because the original sign regulation challenged in that case had been amended in September 2010 to prohibit all supergraphic signs with limited exceptions, none of which applied to Paramount. The Ninth Circuit agreed and dismissed the appeal as moot.
In the unpublished memorandum disposition, the court explained that any claims for declaratory and injunctive relief were moot because a September 2010 amendment to the Hollywood Signage Supplemental Use District (the "Hollywood SUD") prohibited new supergraphic signs and eliminated both the sign reduction program in the Hollywood SUD and the City's delegation of authority to the Community Redevelopment Agency ("CRA") to negotiate exceptions to that program in exchange for certain fees. The court also rejected Paramount's argument that it had live claims for damages "because Paramount, for strategic reasons, disavowed damages before the district court." While Paramount had argued that the disavowal was only intended to cover "past damages" and that it could still pursue damages arising between this Court's June 2008 summary judgment and the September 2010 amendment to the Hollywood SUD, the court disagreed in light of Paramount's admission that it "has acknowledged that it is not seeking damages in this action." Importantly, the court reasoned that, "[i]n any event, Paramount is not able to demonstrate that any alleged damages it incurred after the district court's order resulted from application of the provisions of the Hollywood SUD challenged in the complaint." The court also rejected the possibility that attorney's fees created a live controversy where none otherwise existed.
After this disposition, the parties briefed its impact in this case, as well as the impact of Vanguard, a third published decision in a similar case rejecting challenges to the City's regulations of supergraphic signs.
II. Allegations in the SAC*fn1
In dismissing most of the FAC, the Court ruled that only the following claims remained live: (1) claims for damages directed at the Original Hollywood SUD; (2) as-applied claims that the City allowed some signs as exceptions to the Amended Hollywood SUD; (3) as-applied claims directed at the City's general Sign Ordinance; (4) equal protection claims of discriminatory treatment; and (5) takings claims. (Docket No. 67.) In the SAC, Paramount retreads much of the same ground as in the FAC, albeit with some clearer explanation of the nature of its remaining claims.
As relevant here, Paramount has provided more information for its allegations that some companies have been approved to erect supergraphic and other signs in the Hollywood SUD and elsewhere, even though those signs should have been subject to the same conditions as Paramount's signs, which were prohibited:
1. The City issued permits in January 2011 for supergraphic signs on the Hollywood Metropolitan Hotel at 5825-5827 Sunset Blvd. in the Hollywood SUD without requiring the developers of the site to comply with the sign take-down or reduction program in the Original Hollywood SUD. (SAC ¶ 49(a)(1).) Paramount claims that the developers were allowed a 1-to-35 take-down ratio, were permitted to use non-standard materials, and were given a twenty-year permit, which doubled the length of a standard permit. (Id.) Paramount claims that these allowances were more lenient than those the City required of it and that the City found these supergraphic signs, which were similar to Paramount's signs, would have no negative impact on the visual environment. (Id.)
2. In July 2010, the City permitted supergraphic signs on the "W" Hotel at 6250 W. Hollywood Blvd. and the Legacy Apartments at 1600 N. Vine St. in the Hollywood SUD by allowing variances without compliance with the take-down or in lieu fees under the Original Hollywood SUD. (SAC ¶ 49(a)(2).)
3. On November 17, 2010, the City permitted CBS Outdoor to erect supergraphic signs at 6725 Sunset Blvd. in the Hollywood SUD, which Paramount alleges was "in compliance with the City's sign regulations." (SAC ¶ 49(a)(3).)
4. In 2010, the City permitted supergraphic signs on the building at 6933 W. Hollywood Blvd. in the Hollywood SUD without requiring the company to comply with the sign reduction program in the Original Hollywood SUD and requiring the company to pay only $39,000 as an "in lieu" fee, which contrasted with the $1.2 million required from Paramount. (SAC ¶ 49(a)(4).)
5. The City permitted supergraphics at the L.A. Live Complex in 2009, which is not within the Hollywood SUD. (SAC ¶ 49(a)(5).)
6. The City recently allowed supergraphic signs at 7021 Hollywood Blvd. in the Hollywood SUD. (SAC ¶ 49(a)(6).)
7. In 2009 and 2010, the City permitted supergraphic signs on the Marriot/Ritz Carlton downtown, which is not within the Hollywood SUD. (SAC ¶ 49(a)(7).)
8. As recently as December 2010, the City approved supergraphic signs at 6200 W. Hollywood Blvd. in the Hollywood SUD, but "may not have" required the owner to take down its own signs, instead giving credit for taking down others' signs, and may have granted variances to erect more signs than would have been allowed under the Original Hollywood SUD.
9. In October 2008, the City and the CRA permitted supergraphic signs at 1480 Vine St./6290 Hollywood Blvd. for CIM, allowing CIM to pay a smaller "in lieu" fee than Paramount under the sign reduction program in the Original Hollywood SUD. (SAC ¶ 49(a)(9).) The City's Planning Department found that CIM's signs would not negatively impact the visual environment, even though they were similar to Paramount's. (Id.)
10. In August 2010, the City permitted supergraphic signs at 1724 Highland Blvd. in the Hollywood SUD. (SAC ¶ 49(a)(10).)
11. On May 21, 2010, the City permitted CIM to erect a "roof sign" at 6904 W. Hollywood Blvd. in the Hollywood SUD, which Paramount claims was akin to a supergraphic sign, but was not required to comply with the Original Hollywood SUD's restrictions on supergraphics. (SAC ¶ 49(a)(11).)
12. In February 2011, the City entered a settlement agreement with CBS Outdoor regarding four properties (1025 Highland Ave., 939 S. Figueroa St., 6253 Hollywood Blvd., and 115 W. Washington Blvd.) and permits for three of these properties were deemed to be vested under the Amended Hollywood SUD, which allowed CBS Outdoor to erect signs at those locations. (SAC ¶ 49(a)(12).)
13. The City permitted three illuminated supergraphic signs at 1800 Highland Ave. on February 10, 2011, pursuant to a project approved by the CRA in November 2008, which contained exceptions to the Original Hollywood SUD's take-down requirements. (SAC ¶ 49(a)(13).)
14. The CRA "recently" approved supergraphic signs at 5939 Sunset Blvd. in the Hollywood SUD. (SAC ¶ 49(a)(14).)
15. The City "has allowed supergraphics to be maintained" at 1735 Vine St. in the Hollywood SUD. (SAC ¶ 49(a)(15).) (FAC ¶ 49(a).)
Paramount once again advances various free speech claims, identifying ten reasons why the City's Sign Regulations, including the Sign Ordinances and the Original and Amended Hollywood SUDs have violated Paramount's free speech rights:
1. Paramount's first claim is an as-applied challenge under Central Hudson*fn2 to the Original Hollywood SUD because the City applied it to Paramount but did not apply it to ban other companies' supergraphic signs. (SAC ¶ 62(1).) Paramount alleges that any ban on supergraphic and offsite signs in the Original Hollywood SUD, including signs subject to the Sign Reduction Program, failed to advance the City's goals because the City granted numerous permits that worked at cross-purposes with the stated reasons for the ban and irrationally distinguished speakers. (SAC ¶ 62(1)(a)-(b).) Further, the ban on supergraphics signs was underinclusive because other types of signs, such as digital signs, roof top signs, and billboards, were permitted and have become prevalent in the Hollywood SUD. (SAC ¶ 62(1)(c).)
2. Paramount's second claim is an as-applied Central Hudson challenge to the City's Sign Regulations because they granted irrational exceptions to the supergraphic and offsite sign bans in the same way as alleged in claim one, above.
3. Paramount's third claim is an as-applied Central Hudson challenge to the Amended Hollywood SUD for the same reasons as noted above, based on signs allowed after the November 17, 2010 effective date of the Amended Hollywood SUD. (SAC ¶ 62(3).)*fn3 Paramount points to four such locations for supergraphic signs that have been permitted at 6200 Hollywood Boulevard, 5825 West Sunset Boulevard, 6725 Sunset Boulevard, and 1800 North Highland Avenue, all within the Hollywood SUD. (Id.) Paramount claims that the City will also allow fifteen additional supergraphic signs pursuant to a "grandfathered" provision in the Amended Hollywood SUD. (Id.)
4. Paramount's fourth claim advances an as-applied "unbridled discretion" challenge that the Original Hollywood SUD gave city officials unfettered discretion to permit or prohibit speech. (SAC ¶ 62(4).) Particularly, the Original Hollywood SUD's "sign reduction program" allowed officials to grant permits to projects that would have been "beneficial" to the area, but did not also create standards to allow for judicial review. (Id.) The "as-applied" portion of this claim states in total: "In contrast to other parties, City administrators refused to even process or review Paramount's applications and knowingly subjected it to the delegated whims of CRA officials, knowing that other parties were receiving more favorable treatment." (Id.)*fn4
5. Paramount's fifth claim sets forth an as-applied "unbridled discretion" challenge that the Amended Hollywood SUD does not set objective guidelines for allowing supergraphic signs and perpetuates prior discriminatory decisions by creating "grandfathered," "tolling," and "vesting" exceptions to the blanket ban on supergraphic signs. (SAC ¶ 62(5).) Particularly, Paramount claims that there are no objective standards to interpret and apply the terms "substantial liabilities," "substantial work," or "good faith reliance," which are used to determine whether the "grandfathered" and "vesting" exceptions in the Amended Hollywood SUD apply to a particular sign. (Id.) Paramount points to several supergraphic signs that have fallen within these exceptions: three supergraphics at 1800 Highland Avenue; supergraphics at 5825-5827 Sunset Boulevard; and supergraphics at 6725 Sunset Boulevard and other properties on behalf of CBS Outdoor, Inc. (Id.)
6. Paramount's sixth claim asserts an as-applied First Amendment challenge to the Original and Amended Hollywood SUDs because they favor large companies who own billboard structures and could afford to take down some signs under the sign removal program or purchase "take-down rights" from other entities, which resulted in viewpoint discrimination against speakers who could not afford to participate in the program. (SAC ¶ 62(6).)
7. Paramount's seventh claim alleges an as-applied First Amendment challenge to the Original Hollywood SUD because the "in lieu" fee required to erect supergraphic signs was an "illegal charge for, and tax on, speech" that carried no standards to fix the amount of fees. (SAC ¶ 62(7).)
8. Paramount's eighth claim asserts an as-applied First Amendment challenge to actions by the City in ignoring Paramount's permit requests and allowing City officials to influence the permitting process in favor of other entities. (SAC ¶ 62(8).) Particularly, Paramount claims that the City allowed officials in the Planning Department, the Department of Building Safety, the Fire Department, and the Hollywood Community Redevelopment Agency (the "CRA") to deny Paramount's permit applications, while accepting others' applications for similar signage. (Id.)
9. Paramount's ninth claim asserts the same speech claims against the Original and Amended Hollywood SUDs as outlined above, but under the California Constitution's protection of commercial speech. (SAC ¶ 62(9).)
10. Finally, Paramount's tenth claim seeks a declaration that Paramount's permit applications should be deemed "vested" and "grandfathered" under the Amended Hollywood SUD because, but for the unlawful denial of permits under the Original Hollywood SUD, Paramount could take advantage of those provisions to obtain permits. (SAC ¶ 62(10).)
C. Equal Protection and Takings Claims
Based on the same set of facts, Paramount also advances equal protection and takings claims. Paramount's equal protection claims rest on essentially the same allegations as its free speech claims, i.e., that similarly situated sign companies have been given permits to erect supergraphic signs on different terms than those offered to Paramount. (SAC ¶ 71.) Paramount's takings claim alleges an "as-applied" challenge that the City imposed conditions on Paramount's permit requests that had no nexus with any legitimate interest of the City. (SAC ¶ 82.) Among the fees and other requirements, the City demanded that Paramount dedicate a portion of the Sunset Properties for public use as a parking structure, construct another level of parking "presumably for public use," and maintain a certain "class" of tenants and quality to its building, "also presumably for the public's benefit." (Id.)
A complaint survives a motion to dismiss under Rule 12(b)(6) if it contains a "short and plain statement of the claim showing that the pleader is entitled to relief," which does not require "detailed factual allegations," but it "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, U.S. __, __, 129 S. Ct. 1937, 1949 (2009). A claim must be "plausible on its face," which means that the Court can "draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.; see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In other words, "a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal quotations and alterations omitted). Allegations of fact are taken as true and construed in the light most favorable to the nonmoving party. See Newdow v. Lefevre, 598 F.3d 638, 642 (9th Cir. 2010), cert. denied, 131 S. Ct. 1612 (2011).
In analyzing the sufficiency of the complaint, the Court must first look at the requirements of the causes of action alleged. See Iqbal, 129 S. Ct. at 1947. The Court may then identify and disregard any legal conclusions, which are not subject to the requirement that the Court must accept as true all of the allegations contained in the complaint. Id. at 1949. The Court must then decide whether well-pleaded factual allegations, when assumed true, "plausibly give rise to an entitlement to relief." Id. at 1950. In doing so, the Court may not consider material beyond the pleadings, but may consider judicially noticeable documents, documents attached to the complaint, or documents to which the complaint refers extensively or which form the basis of the plaintiff's claims in the complaint. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).
The City has moved to dismiss all of Paramount's claims on various grounds, each of which is discussed below. However, both parties have requested judicial notice of documents to support their positions, and the Court addresses those requests first.