Reed v. Gilbert, 707 F.3d 1057 (9th Cir., 2013), Cert. Granted (July 1, 2014), involved the validity and constitutionality of Defendant Town of Gilbert’s sign regulations as applied to temporary directional signs for church services in an adjacent town. The instant decision involved an appeal from a Trial Court decision on remand from the Ninth Circuit in which that Court found the temporary sign regulations not to be content-based, but rather a reasonable time, place and manner regulation. However, the Ninth Circuit also remanded the case to the Trial Court to determine whether the claim that the First Amendment and the Equal Protection Clause are violated if the regulations favor some noncommercial speech over other noncommercial speech. On remand, the Trial Court found no such violation and the Plaintiff church and its pastor again appealed. In the meantime, Defendant amended its sign regulations, but the Ninth Circuit observed that those amendments could be challenged by Plaintiffs in separate proceedings.
Plaintiffs asserted they were under a religious injunction to convert others and to invite them to their services, which they did, inter alia through these temporary directional signs. There was friction with the Defendant Town, especially because the church services were held in an adjacent town. Defendants’ sign code required a permit for signs but exempted three categories from these requirements – temporary directional signs of a certain size and placement, which are allowed only twelve hours before and one hour after the event that they advertise; political signs dealing with a candidate or ballot measure placed at any time before and within up to ten days after election on that candidate or ballot measure; and ideological signs which are not limited as to time or number. Directional signs have the least amount of allowed area, while ideological signs have the most.
The Ninth Circuit in 2009 affirmed the original Trial Court decision, determining that the case involved an applied challenge, that the sign code was not content-based (as the directional aspects dealt with speakers or events rather than the content of the speech involved), that the ordinance was not unconstitutional because of the limited duration categories, that the ordinance was narrowly tailored to advance the town’s interests in traffic safety and aesthetics, and that alternative channels of communication were available. Additionally, the Court found that commercial speech was not favored over noncommercial speech.
On remand, the Trial Court considered cross-motions for summary judgment to consider the remanded constitutional issues and again dismissed Plaintiffs’ claims. The Court distinguished among the three noncommercial exemptions and found the distinctions not to be prohibited content-based regulations, and did not favor one type of noncommercial speech over another. Thus, the Trial Court found it permissible to have differing durational and size requirements for each of the three noncommercial categories.
On review, the Ninth Circuit said it was bound by the “law of the case,” and as there was no new discovery or any asserted evidentiary facts in the second iteration of the case, the sole basis for the remand was whether the distinctions among the three noncommercial categories constituted discrimination that violated the First Amendment or the Equal Protection Clause.
The Ninth Circuit noted the evolution of jurisprudence relating noncommercial speech beginning with the prohibitions on favoring commercial over noncommercial speech in Metromedia, Inc. v. San Diego, 453 U.S. 490, 541 (1981). While the United States Supreme Court had not directly dealt with this issue since Metromedia, the Ninth Circuit has not been so fortunate. In G.K. Ltd. Travel v. City of Lake Oswego, 436 F.3d 1064 (9th Cir. 2006) that court found that neither reference to a speaker nor event involved content discrimination as enforcement officers were not required to read the sign to determine whether the sign were exempt. The Court said the question in this case was whether the differing requirements for each of the three categories of noncommercial speech could be justified without reference to the content of that speech. The Ninth Circuit responded that it had considered, and rejected, a similar argument in the first iteration of this case adding:
* * *[T]he distinctions between Temporary Directional Signs, Ideological Signs, and Political Signs are content-neutral. That is to say, each classification and its restrictions are based on objective factors relevant to Gilbert’s creation of the specific exemption from the permit requirement and do not otherwise consider the substance of the sign. The Political Signs exemption responds to the need for communication about elections. The Ideological Sign exemption recognized that an individual’s right to express his or her opinion is at the core of the First Amendment. The Temporary Directional Sign exemption allows the sponsor of an event to put up temporary directional signs immediately before the event. Each exemption is based on objective criteria and none draws distinctions based on the particular content of the sign. It makes no difference which candidate is supported, who sponsors the event, or what ideological perspective is asserted. Accordingly, as the speaker and event determinations are generally “content neutral.” Gilbert’s different exemptions for different types of noncommercial speech are not prohibited by the Constitution. (Footnote omitted)
Moreover, the Ninth Circuit found a similar approach had been validated in Hill v. Colorado, 530 U.S. 703 (2000) where a regulation of speech-regulated conduct within 100 feet of a healthcare facility was upheld as it did not regulate the content of any speech. Neither was there such a regulation of the content of temporary directional signs in this case. In Hill, the United States Supreme Court found no regulation of speech content, but only where that speech may be exercised, noting the state interest in protecting access and privacy and a need to provide police with clear guidelines. The United States Supreme Court also added it was not improper to review the content of speech to determine whether a rule of law applied to a course of conduct.
With regard to the differential treatment of the categories of noncommercial speech, the Ninth Circuit reasoned that the temporary directional sign regulations were, standing alone, content-neutral and not in competition with the other noncommercial categories; moreover, those regulations reasonable with respect to their purposes.
The Ninth Circuit, having found the ordinance to be content-neutral, and to be a reasonable time, place and manner restriction, turned to the issues of whether the ordinance was narrowly tailored to serve a significant governmental interest and left open ample alternative channels of communication. The Court recognized traffic safety and aesthetics as significant governmental interests and found the temporary directional signs (unlike political and ideological signs) were properly prohibited from being placed in the right-of-way. Moreover, those signs were not of such core speech importance to be protected as it would be in the other categories which were allowed to be placed in the right-of-way. As noted, there was no competition among the various commercial categories and no showing that the restrictions on temporary directional signs interfered with their purpose of showing would-be patrons the way to church services. Moreover, the Court said it would defer to local judgments on sign size and duration, if they be reasonable. These considerations responded adequately to the obligations of the local government under the First Amendment. The Court concluded with the regulations need not be uniform among all categories of noncommercial speech and may vary with the type of speech involved and how the town’s interests are affected. The Court concluded:
* * *In sum, (a) Gilbert was not required to create an exemption for Temporary Direction Signs, (b) the restrictions on directional signs are rationally related to the purpose of the directional signs, and (c) the restrictions are reasonably designed to promote Gilbert’s interests in aesthetics and safety.
Moreover, the Ninth Circuit found a “reasonable fit” between the public agency ends and the regulatory means chosen to reach those ends. As to alternative channels of communication, the Ninth Circuit was satisfied that Plaintiffs may erect multiple temporary signs in the area and take advantage of other means of communication.
The Ninth Circuit also rejected Plaintiffs’ challenges to the ordinance under the Arizona Free Exercise of Religion Act, vagueness and overbreadth, and equal protection grounds. However as noted, the Court allowed for new litigation to deal with amendments to the Defendants’ sign code made since the Trial Court's second decision.
The gist of this decision is that all noncommercial speech exemptions need not be treated alike, so long as each of the exemptions in content-neutral, narrowly tailored to serve a significant governmental interest, and leaves open ample alternative channels of communication.
Judge Watford dissented, although he agreed that the post-trial ordinance amendments could be challenged in a separate suit. Judge Watford pointed out that the first Ninth Circuit decision considered the temporary directional sign provisions in isolation and found it content-neutral. However, that decision did not evaluate the relationship of that exemption with the political or ideological sign categories; rather the Ninth Circuit remanded the matter to the Trial Court to undertake an analysis of whether favoring one type of noncommercial speech over another was constitutional. It was clear to the dissent that the terms for the three exemptions were different in terms of sign size and duration and that fact lead the dissent to believe that one type of noncommercial speech was unconstitutionally treated more favorably then another. The dissent noted that in a public forum, unless a distinction were based upon some non-communicative aspect of the speech involved, the regulation must fall concluding:
* * *The reason is simple: Within the realm of noncommercial speech, the government may not decide that speech on certain subjects is more (or less) valuable—and therefore more (or less) deserving of First Amendment protection—than speech on other subjects.
The dissent described one reason for the invalidity of the sign code in Metromedia’s plurality opinion is that that ordinance valued certain noncommercial speech (i.e., political signs) over other noncommercial messages, thus concluding:
Gilbert’s sign ordinance violates the First and Fourteenth Amendments by drawing content-based distinctions among different categories of non-commercial speech. The most glaring illustration is the ordinance’s favorable treatment of “political” and “ideological” signs relative to the treatment accorded the non-commercial signs plaintiffs seek to display. Under the ordinance, plaintiffs’ temporary directional signs may not exceed six square feet in size and may not be displayed more than 12 hours before or one hour after the relevant event—here, Sunday morning church services. (Given the 9:00 a.m. start time of Good News’s church services, this durational restriction limits the display of plaintiffs’ signs to periods when it is virtually always dark.) In contrast, “political” signs—defined as “[a] temporary sign which supports candidates for office or urges action on any other matter on the ballot of primary, general and special elections relating to any national, state or local election”—may be up to 32 square feet in size and may be displayed any time prior to an election and removed within 10 days after the election. “Ideological” signs—defined as “a sign communicating a message or ideas for non-commercial purposes”: that is not a constriction, directional, political, or garage sale sign—may be up to 20 square feet in size and are not subject to any durational limits at all.* * *
The United States Supreme Court has granted certiorari in this case and the matter should be heard before the end of the year and decided before June, 2015.
This case presents a very interesting question of whether the First Amendment allows for differentiation and regulations among noncommercial speech. Perhaps in this case the Supreme Court will clear up the plethora of inconsistent authorities in dealing with First Amendment regulations.
Reed v. Gilbert, 707 F.3d 1057 (9th Cir., 2013)
 In October 2011, Gilbert amended the Sign Code to allow placement of Temporary Directional Signs within the public right-of-way
Mount Ulla Historical Preservation Society, Inc. v. Rowan County, 2014 WL 619584 (NC. App.) involved the second attempt of a broadcast company secure a conditional use permit to build a radio tower. The first application had been denied in 2005 on grounds of an air safety hazard to a nearby airport. That denial had been appealed to the North Carolina Court of Appeals but was upheld. In 2010, a slightly lower tower was proposed and approved after the governing body denied a motion to dismiss the application on res judicata and collateral estoppel grounds. The trial court reversed and the Historical Society appealed.
The Court characterized conditional use permit conditions as quasi-judicial and asserted that the trial court decision on this question of law was subject to de novo review. Utilizing North Carolina case law, the Court found that res judicata and collateral estoppels could apply to parties in privity if the facts have not materially changed as to the grounds of the previous denial. In this case, the 2005 denial was due to an air safety hazard and the question was whether a reduction of height by 150-feet of the tower, which was now proposed to 1,200 feet high, was a material change. The Court characterized this as a fact question to which the Court normally deferred to the governing body. However, the Court, in viewing the whole record, found there was nothing that would materially undermine the reasoning of the 2005 decision. The Court said the Respondent essentially had the same facts in both cases and failed to show that the 2005 decision was incorrectly decided based on new facts. Lacking such a basis, the doctrines of res judicata and collateral estoppel applied and the grant of the conditional use permit was found to be correctly reversed by the Trial Court.
Oregon courts in LUBA have been reluctant to apply res judicata and collateral estoppel to quasi-judicial land use decisions. Plans and regulations, as well as facts, change over time and the identity of parties in two cases is rarely the same. However, this North Carolina decision, which turns on whether facts have been materially changed, is an interesting excursion into this area of law. Mount Ulla Historical Preservation Society, Inc. v. Rowan County, 2014 WL 619584 (NC. App.)
Last September, the comment period on a federal Department of Housing and Urban Development’s (“HUD”) proposed rule closed. That rule portends a very different course in the expectations of state and local governments in dealing with affordable housing. While retaining the prohibitions on housing discrimination, the new rule (now being reviewed by the Office of Management and Budget) requires taking proactive steps “to address significant disparities in access to community assets, to overcome segregated living patterns and support and promote integrated communities, to end racially and ethnically concentrated areas of poverty, and to foster and maintain compliance with civil rights and fair housing laws.”
Most local governments take federal funds for housing or urban development, which implicates the new rules. Those funds take the form of loan guarantees, urban renewal grants, homelessness programs, disaster relief, transportation and other infrastructure funds and a variety of other means. A state or local grantee is “required to submit a certification that it will affirmatively further fair housing (“AFFH”), which means that it will (1) conduct an analysis to identify impediments to fair housing choice within the jurisdiction; (2) take appropriate actions to overcome the effects of any impediments identified through that analysis; and (3) maintain records reflecting the analysis and actions in this regard.” The AFFH obligation extends to all housing and housing-related activities in the grantee’s jurisdictional area whether publicly or privately funded.
One effect of the new rule, which is likely to be challenged in the federal courts, is that housing issues will not be treated in isolation, but in a relationship with other drivers of urban development. Thus, the connections between affordable housing and transportation or zoning, community expenditures in public services and facilities, racial or ethnic segregation and residency preferences or requirements are relevant issues for analysis and action.
Potentially, the new rule is not another effort at paper shuffling to deal with housing needs. Receipt of federal housing funds requires repeated AFFH certifications of compliance with the analysis, action and records obligations noted above. The rule requires action to deal with problems identified, in part, by the use of uniform data. A state or local government may thus be sued for doing nothing in the face of an identified problem. Moreover, for those public agencies that certify compliance and do nothing or which support efforts to thwart affordable housing, litigation may be brought under the False Claims Act and if the AFFH certifications were false, treble damages and attorney fees may be awarded, with a possible share going to a “relator,” one who “blows the whistle” on a non-complying government.
The case of Westchester County, New York, even though brought under current law, is instructive. Although certifying that it was affirmatively furthering fair housing when it received over $52 million in federal grants over the years, the County did not consider race-based impediments to fair housing choice even though it was part of one of the most segregated regions in the country. The County made no mention of housing discrimination or residential segregation and was successfully sued by a nonprofit activist organization under the False Claims Act. The federal government joined the suit and a settlement was ultimately reached under which 750 affordable housing units must be built within 7 years in the “whitest” neighborhoods of the County, the County must return $30 million to HUD because of its false certifications, $21.6 million of which was to Fund Integrative Units (which was supplemented by another $30 million from the County), which was also required to pay $7.5 million to the “Relator” for ferreting out false claims and another $2.5 million in attorney fees and costs. While the racial overtones of the County’s actions were extreme, the new rule raises the bar for reporting, actions and records required of state and local governments in housing matters.
Because the new rule does not depend on federal funding for enforcement, it is likely that nonprofit affordable housing organizations will follow the lead of their environmental brethren to undertake enforcement activity, using the “bounty” provided by the False Claims and Civil Rights Acts to fund further enforcement. If the rule is enacted and survives OMB review and court challenges, the national housing picture will be very much changed indeed. In Oregon, the new rule may spell the end on the statutory provision against inclusionary zoning and Metro’s prohibition on forcing higher densities in existing neighborhoods. We all may be in for a very bumpy ride indeed.
On June 10, 2014, the City of San Jacinto, in Riverside County, California, entered into a consent decree with the Department of Housing and Urban Development (HUD) to resolve a lawsuit alleging disability discrimination under the Fair Housing Act (FHA) and Americans with Disabilities Act (ADA). The City agreed to change its land use laws governing group home living, and to pay a total of $746,599 in compensatory damages to housing providers and former residents with disabilities, as well as a $10,000 civil penalty to the United States. The damages also include private plaintiffs’ attorneys’ fees and costs.
The settlement marks an end to an almost two-year-old complaint, but a six–year-old battle, where private group home operators claimed the City enacted an ordinance intended to exclude unlicensed and some licensed homes for persons with disabilities, and by targeting homes for persons with disabilities for enforcement of the ordinance and other local laws.
On October 3, 2008, the City Council amended the San Jacinto Zoning Code (the “Zoning Code") by approving Ordinance 08-14 (the “ordinance"), which was passed by unanimous vote of the council. The ordinance amended the Zoning Code's definition of "Group Home" or "Group Housing" to "[a] residence or dwelling, other than a hotel, wherein two (2) or more rooms, with or without individual cooking facilities, are rented to individuals under separate rental agreements or leases, either written or oral, whether or not an owner, agent, or rental manager is in residence, in order to preserve the residential character of the neighborhood." The ordinance specifically exempted certain state-licensed congregate living facilities, such as "community care facilities," from its definition of "group homes," making those with six or fewer residents permitted uses in residential zones.
Prior to and after the City's enactment of the ordinance, the city's zoning code defined "family" as "an individual or two (2) or more persons related by blood, marriage or legal adoption, or a group of not more than 6 persons who are not related, living together as a single house-keeping unit in a dwelling unit."
In conjunction with the passage of the ordinance, the City’s code enforcement officers, including uniformed officers of the County Sherriff’s Department, investigated group homes. These actions included intrusive and direct questioning of residents about whether they were on parole, on medication and/or recovering from addiction. After these investigations, the City continued to cite providers of group homes for persons with disabilities for illegal operation of a group home in a residential zone.
Thereafter, the City allowed for a reasonable accommodation process to consider placing group homes in residential neighborhoods, but its proposed conditions were not acceptable to group home providers and they filed a complaint.
HUD’s investigation led to findings that the City had, in fact, discriminated against people with disabilities under the FHA and ADA. The consent decree provides the following injunctive relief:
- The City shall not impose restrictions on housing for persons with disabilities not imposed on housing for an equal or greater number of persons without disabilities. Actions prohibited include, but are not limited to, the imposition, through any provision or practice, of numerical occupancy limits on group housing for unrelated persons with disabilities that is more restrictive than numerical occupancy limits for families or other unrelated persons.
- The City was required to adopt new ordinances to establish a new zoning classification, "Group Homes for Persons with Disabilities," and amend the City's reasonable accommodation procedure.
- The City is required to maintain records of all oral and written requests for reasonable accommodation or modification and the City's responses thereto for a period of three (3) years following the date of the request and the group home’s response, as applicable.
- The City shall not impose any additional fees, costs, or otherwise retaliate against any person who has exercised his or her right under the FHA or ADA to make one or more requests for reasonable accommodation or modification.
- Immediately upon entry of the consent decree, the City shall cease any efforts to close or bring other enforcement actions against housing for persons with disabilities operated in accordance with the FHA and the ADA, including but not limited to, homes for persons with disabilities operated by the complainants (City by Aurora Beltran and Rajeeyah Bilal-Vamey located at 325 East Third Street and 1835 Rogers Way, respectively), so long as these homes continue to operate in compliance with all laws.
- The City is required to appoint a Fair Housing Compliance Officer, and City staff, City Council members, Planning Commissioners, and the Sherriff’s officers are required to undergo fair housing training.
HUD’s investigations of fair housing violations are taking an expensive toll on local governments. If you advise a city that is considering restrictive zoning; or differential treatment of the number of family members as compared to the number of unrelated people with disabilities that can live together in the same zone, then consider the San Jacinto consent decree as a warning to take such actions cautiously. If the ordinance ultimately results in unfair treatment to group home providers, then do not be surprised if fair housing advocates complain to HUD.
We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.