Adams Outdoor Advertising Ltd v. PA Dept of Transportation

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 18-2409
________________
ADAMS OUTDOOR ADVERTISING
LIMITED PARTNERSHIP,
a Limited Partnership Organized Under the Laws
of the State of Minnesota,
by its Managing General Partner, Adams Outdoor GP, LLC,
Appellant
v.
PENNSYLVANIA DEPARTMENT OF
TRANSPORTATION;
LESLIE RICHARDS, Individually and in her capacity
as Secretary of Transportation,
Acting as the Chief Executive Officer of the Pennsylvania
Department of Transportation
________________
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 5-17-cv-01253)
District Judge: Honorable Joseph F. Leeson
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Argued March 5, 2019
Before: SMITH, Chief Judge, AMBRO,
and RESTREPO, Circuit Judges
(Opinion filed: July 15, 2019)
Victor F. Cavacini (Argued)
Gross McGinley
33 South 7th Street
P.O. Box 4060
Allentown, PA 18105
Counsel for Appellant
Josh Shapiro
Attorney General
Claudia M. Tesoro (Argued)
Senior Deputy Attorney General
J. Bart DeLone
Chief Deputy Attorney General
Office of Attorney General
1600 Arch Street, Suite 300
Philadelphia, PA 19103
Counsel for Appellee
________________
OPINION OF THE COURT
________________
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AMBRO, Circuit Judge
Adams Outdoor Advertising, L.P., wants to install a
billboard near an interchange on U.S. Route 22 in Hanover
Township, Pennsylvania. Adams sought a permit from the
Pennsylvania Department of Transportation (“PennDOT”), but
it denied the permit under a provision of Pennsylvania law that
prohibits “off premise” billboards within 500 feet of a highway
interchange. Adams contends that provision—called the
“Interchange Prohibition”—violates the First Amendment
because it is too vague or, alternatively, because it does not
survive First Amendment scrutiny. Adams also claims that
PennDOT’s permitting requirement for highway billboards
separately violates the First Amendment because there is no
time limit for its decisions on applications.
The District Court ruled in Adams’ favor on the time-
limit claim and entered an injunction barring the enforcement
of the permit requirement until PennDOT establishes
reasonable time limits on its permit decisions. It dismissed,
however, Adams’ vagueness challenge on the pleadings and
entered summary judgment against Adams on its First
Amendment scrutiny challenge.
We affirm in part and reverse in part. As to the former,
we join the District Court in concluding that PennDOT’s
permit requirement violates the First Amendment because it
lacks a reasonable time limit for permit determinations, and
thus sustain the injunction. Further, we affirm the Court’s
dismissal of Adams’ vagueness challenge because the
Interchange Prohibition communicates clearly what it
prohibits. But we cannot sustain its entry of summary
judgment in favor of PennDOT Secretary Richards on Adams’
challenge to the scrutiny required to assess the Interchange
Prohibition. Although we conclude the Prohibition is not
3
subject to strict scrutiny, the record is insufficient to establish
the required reasoning for the prohibition. We thus reverse on
that claim and remand for further proceedings.
I. Background
A. Statutory Background
The Highway Beautification Act of 1965, 23 U.S.C.
§ 131, establishes a framework for federal–state agreements
governing the size, lighting, and spacing of outdoor advertising
signs (colloquially, “billboards”) near highways. States that do
not enter into and comply with their federal–state agreements
under the Beautification Act lose certain funds for highway
programs. See 23 U.S.C. § 131(b).
Pennsylvania meets its obligations under the
Beautification Act through the Pennsylvania Outdoor
Advertising Control Act of 1971, 36 Pa. Stat. §§ 2718.101–
.115. PennDOT administers the Act through its Secretary,
defendant-appellee Leslie Richards. 36 Pa. Stat. § 2718.106.
Two aspects of the Act are relevant in this appeal. First,
its Interchange Prohibition bars the installation of any billboard
within 500 feet of an “interchange” or “safety rest area” unless
the billboard is an “official” or “on premise” sign as defined in
23 U.S.C. § 131(c). See 36 Pa. Stat. § 2718.105(c)(2)(i), (iv).
Second, the Act sets up a permitting regime requiring persons
to obtain permits from either PennDOT or a PennDOT-
authorized entity to install billboards regulated by the former.
See 36 Pa. Stat. § 2718.107. The Act does not establish a time
limit to decide permit applications.
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B. Facts and Procedural History
Adams is a company that acquires or leases private land
to install and maintain outdoor advertising signs as a medium
of communication by the public. It receives the customer’s
desired message, secures permits, and installs the message on
a sign. All the signs Adams installs are “off premise” signs—
that is, they communicate a message concerning neither the
specific property where the sign is displayed nor the business
or activities that occur there. An example of an “off premise”
sign would be one advertising a law firm, a political campaign,
or any other business or organization that does not operate on
the location where the sign is installed.
In March 2016 Adams applied to PennDOT for a permit
to install a billboard alongside U.S. Route 22 in Hanover
Township. The application remained pending for more than a
year. During that time Adams filed this lawsuit, which
prompted PennDOT to act. It denied the application because
the billboard’s proposed location was less than 500 feet from a
highway interchange in violation of the Interchange
Prohibition.
Adams named both Secretary Richards and PennDOT
as defendants, but PennDOT was dismissed early in the
proceedings. Adams does not challenge that dismissal on
appeal. The Complaint alleges six claims under the First
Amendment, three of which are relevant here: the Interchange
Prohibition violates the First Amendment because (1) it is too
vague, (2) it is a content-based regulation that on its face cannot
survive the scrutiny called for by the Amendment, and (3) its
permitting requirement does not impose a time limit on
PennDOT to rule on applications.
The District Court dismissed the vagueness challenge
on the pleadings. Adams Outdoor Advert. Ltd. P’ship v. Pa.
5
Dep’t of Transp., 307 F. Supp. 3d 380, 390–93 (E.D. Pa. 2018).
It also denied the motion to reconsider that dismissal. Adams
Outdoor Advert. Ltd. P’ship v. Pa. Dep’t of Transp., 321 F.
Supp. 3d 526, 534–35 (E.D. Pa. 2018). The other two claims
went through discovery. The Court then granted summary
judgment for Secretary Richards on the First Amendment
scrutiny challenge to the Interchange Prohibition. Id. at 535–
39. But it granted summary judgment for Adams on the permit
challenge and issued an injunction prohibiting PennDOT from
enforcing the Act’s permitting requirement until it issues rules
establishing time constraints for its decisions on applications.
Id. at 541–45.
On appeal, Adams challenges the District Court’s
resolution on all three of these claims. Although Adams won
summary judgment on the last issue, it contends the proper
relief is an injunction compelling the Pennsylvania General
Assembly to amend the Act. Secretary Richards contends the
District Court should not have entered an injunction at all,
though she did not appeal the District Court’s decision granting
it and acknowledged at oral argument that she is not
challenging it.
II. Jurisdiction and Standard of Review
The District Court had jurisdiction under 28 U.S.C.
§ 1331. We have jurisdiction under 28 U.S.C. § 1291 and
review de novo its orders granting summary judgment and
granting Secretary Richards’ motion to dismiss for failure to
state a claim. Dwyer v. Cappell, 762 F.3d 275, 279 (3d Cir.
2014); Vorchheimer v. Phila. Owners Ass’n, 903 F.3d 100, 105
(3d Cir. 2018). We review the District Court’s “fashioning of
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a remedy according to an abuse of discretion standard.”
Anderson v. Davila, 125 F.3d 148, 159 (3d Cir. 1997).
III. Discussion
A. Vagueness Challenge
Our Supreme Court has identified two grounds on
which to hold a statute impermissibly vague. “First, if it fails
to provide people of ordinary intelligence a reasonable
opportunity to understand what conduct it prohibits.” Hill v.
Colorado, 530 U.S. 703, 732 (2000). “Second, if it authorizes
or even encourages arbitrary and discriminatory enforcement.”
Id.
We join the District Court in concluding that Adams
failed to allege either form of vagueness. The Interchange
Prohibition clearly conveys what it prohibits. It bans the
installation of billboards within 500 feet of either side of an
interchange on a divided highway, other than “official” or “on
premise” billboards, as defined by federal law. Official signs
are “[d]irectional or other official signs or notices erected and
maintained by public officers or agencies . . . for the purpose
of carrying out an official duty or responsibility.” 23 C.F.R.
§ 750.105(a) (incorporated into the Interchange Prohibition by
reference, see 36 Pa. Stat. § 2718.105(c)(2)(iv), 23 U.S.C.
§ 131(c)). On-premise signs are those that “advertise the sale
or lease of, or activities being conducted upon, the real property
where the signs are located.” 23 C.F.R. § 750.105(a)
(incorporated into the Interchange Prohibition by reference,
see 36 Pa. Stat. § 2718.105(c)(2)(iv), 23 U.S.C. § 131(c)). The
Prohibition is clear enough that a person of ordinary
intelligence would “understand what conduct it prohibits.”
Hill, 530 U.S. at 732. The provision also does not give
PennDOT authorization to enforce arbitrarily or in a
discriminatory way. When construing the provision, its
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discretion is cabined by explicit distance measurements, and
Adams does not allege any facts suggesting PennDOT applies
those metrics in an arbitrary or discriminatory manner.
Adams instead complains that PennDOT’s
interpretation of its 500-foot radius has changed a few times
since the provision’s enactment in 1971. At times between
1971 and 1997, PennDOT construed the provision’s 500-foot
radius to extend from highway interchanges on only one side
of a divided highway. That position altered in 1997, when
PennDOT issued a guidance letter (the “1997 Strike-Off
Letter”) establishing its position—held continuously since
then—that the Interchange Prohibition applies to both sides of
a divided highway.
Adams asserts the changes in PennDOT’s interpretation
prove the Interchange Prohibition is unconstitutionally vague.
We disagree. Although the provision is broad enough to permit
more than one agency interpretation, that does not mean it is
unconstitutionally vague. That is so because in evaluating a
vagueness challenge to a state law, “a federal court must, of
course, consider any limiting construction that a state court or
enforcement agency has proffered.” Vill. of Hoffman Estates
v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494 n.5
(1982). In other words, we can consider the 1997 Strike-Off
Letter when evaluating the vagueness challenge of Adams, and
that letter cures the supposed vagueness it asserts.
Accordingly, we affirm dismissal on the pleadings of
Adams’ vagueness claim.
B. Scrutiny Challenge to Interchange
Prohibition
Adams also contends the Interchange Prohibition is a
content-based restraint of speech that is subject to, and does not
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satisfy, strict scrutiny—that is, the requirement that a law must
further a compelling government interest by the least
restrictive means. See Free Speech Coal., Inc. v. Attorney
General, 825 F.3d 149, 164 (3d Cir. 2016).
Before reaching the merits of this claim, we address a
question raised by the District Court: whether Adams has
standing to challenge the Interchange Prohibition’s exemption
of official and on-premise signs even though it does not wish
to install either of those sign types. Standing requires (1) an
“injury in fact” that is (2) “fairly traceable to the challenged
action of the defendant” and (3) capable of a court remedy. Id.
at 165 (internal quotation marks and citation omitted).
We conclude Adams has standing. Its liberty to speak
is restrained by PennDOT’s enforcement of the Interchange
Prohibition, and an order invalidating that provision would
restore that liberty. It does not matter, for purposes of our
standing analysis, that Adams challenges the Prohibition by
pointing to exemptions for which it does not qualify.
Challengers of outdoor advertising restraints often point to
exemptions enjoyed by others when seeking to challenge a
restraint as contrary to the First Amendment. See, e.g., Reed v.
Town of Gilbert, 135 S. Ct. 2218, 2230 (2015); Riel v. City of
Bradford, 485 F.3d 736, 748–54 (3d Cir. 2007). That approach
is proper here.
As to the merits, we begin by determining what level of
First Amendment scrutiny to apply to the Prohibition. Adams
contends it is subject to strict scrutiny because it exempts
“official” and “on premise” signs.
We deal first with the exemption for official signs. As
noted, they are “[d]irectional or other official signs or notices
erected and maintained by public officers or agencies . . . for
the purpose of carrying out an official duty or responsibility.”
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23 C.F.R. § 750.105(a). These are forms of government
speech, and an exemption for them does not trigger strict
scrutiny. See Pleasant Grove City v. Summum, 555 U.S. 460,
467–68 (2009); accord Town of Gilbert, 135 S. Ct. at 2233
(Alito, J., concurring). Adams does not meaningfully dispute
this point.
The exemption for on-premise signs is a closer call. As
noted, they “advertise the sale or lease of, or activities being
conducted upon, the real property where the signs are located.”
23 C.F.R. § 750.105(a). An example is a sign advertising a
restaurant that is installed on the property where the restaurant
is located. The leading decision by our Court in this area is
Rappa v. New Castle County, 18 F.3d 1043 (3d Cir. 1994).
There we set out a framework for reviewing the
constitutionality of outdoor advertising regulations that
provide exemptions for signs that convey messages with a
“significant relationship” to the property where they are
located. Id. at 1065–66. We drew a distinction between two
kinds of on-premise signs: (1) those that advertise the
“activities conducted on the premises,” and (2) those that
advertise “the sale or lease of the real property on which they
are located.” Id. at 1066–67 & n.42.1 For both, Secretary
1
Adams presses us to deviate from Rappa and apply strict
scrutiny under Town of Gilbert, 135 S. Ct. at 2230–31. We
decline. That case did not address an exemption for on-
premise signs, and the concurring opinions by Justices Alito
and Kagan, which received a total of six votes, both indicated
that on-premise sign regulations are content neutral and
expressed that strict scrutiny would not apply to outdoor
advertising regulations merely because they provide an
exemption for on-premise signs. See id. at 2233 (Alito, J.,
concurring) (stating that “[r]ules distinguishing between on-
premises and off-premises signs” would not trigger strict
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Richards bears the burden to prove the exemptions survive the
applicable First Amendment scrutiny.
1. Exemption for on-premise “for
sale or lease” signs
An exemption for on-premise “for sale or lease” signs
is subject to a special “context-specific” scrutiny we crafted in
Rappa—the exemption must be “substantially related to
advancing an important state interest that is at least as
important as the interests advanced by the [overall prohibition],
. . . no broader than necessary to advance the special goal,
and . . . narrowly drawn so as to impinge as little as possible on
the overall goal.” 18 F.3d at 1065.
Secretary Richards has not carried her burden to show
the Interchange Prohibition’s exemption for on-premise “for
sale or lease” signs meets this context-specific test. She does
not present evidence of the specific government interests at
stake, nor does she show, as she must, that the government’s
interest in providing an exemption for on-premise “for sale or
lease” signs is “at least as important as” that served by the
Prohibition itself. Id. at 1065–67. She also does not present
evidence concerning the narrow tailoring of that exemption. In
scrutiny); id. at 2236–37 (Kagan, J., concurring in the
judgment) (finding it “challenging to understand why” strict
scrutiny would apply to sign regulations that do not suggest
government censorship or viewpoint discrimination).
In addition, because of its splintered reasoning, Town of
Gilbert did not establish a legal standard by which to evaluate
laws that distinguish between on-premise and off-premise
signs. We thus fall back to our precedent in Rappa for
reviewing sign regulations exempting on-premise signs. See
United States v. Tann, 577 F.3d 533, 541 (3d Cir. 2009).
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short, she has not carried her burden to justify the Prohibition’s
exemption for on-premise “for sale or lease” signs.
2. Exemption for on-premise signs
concerning activities on the
property
Under Rappa, an exemption for on-premise signs
concerning activities on the property is subject to intermediate
scrutiny, see 18 F.3d at 1067 & n.42—that is, it must be
“narrowly tailored to serve a significant governmental interest,
and . . . leave open ample alternative channels for
communication of the information.” Id. at 1075 (quoting Ward
v. Rock Against Racism, 491 U.S. 781, 791 (1989) (quoting
Clark v. Cmty. for Creative Non-Violence, 468 U.S. 288, 293
(1984))).
Secretary Richards has not carried her burden to justify
the Prohibition’s exemption for signs concerning activities on
the property. Indeed, the record does not satisfy any of the
prongs of intermediate scrutiny: it does not contain evidence
of the specific government interests furthered, nor evidence of
narrow tailoring, nor evidence that “ample alternative channels
for communication” are left open.
In sum, the lack of record evidence prevents us from
affirming the District Court’s entry of summary judgment
against Adams on its challenge to the Interchange Prohibition
based on First Amendment scrutiny. Accordingly, we reverse
that portion of the District Court’s ruling and remand for the
parties to litigate further Secretary Richards’ justification for
the restraint and its exemptions.
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C. The Injunction
Finally, we review the District Court’s entry of an
injunction prohibiting Secretary Richards from enforcing the
Act’s permit requirement until PennDOT establishes time
limits on its permit decisions.
The Act’s permit regime is a prior restraint on speech.
Riel, 485 F.3d at 756. As such, it “presents peculiar dangers to
constitutionally protected speech.” Freedman v. Maryland,
380 U.S. 51, 57 (1965) (discussing the dangers of prior
restraint in the context of motion-picture censorship). To
address those dangers, the First Amendment requires “strict
administrative time limits” on permit decisions and “the
possibility of prompt judicial review” of permit denials. City
of Littleton v. ZJ Gifts D-4, LLC, 541 U.S. 774, 779 (2004)
(construing FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 220–
21, 228, 239 (1990)).2 These requirements diminish the risk of
arbitrarily or “indefinitely suppressing permissible speech.”
Riel, 485 F.3d at 756 (quoting FW/PBS, 493 U.S. at 227).
There is no bright-line rule as to what a “strict
administrative time limit” is in this context, yet we easily
conclude the Act does not satisfy it in this case. For the Act
contains no time limit at all, and neither do the regulations
implementing it. In practice this has caused permit
applications to remain pending for prolonged periods of time—
sometimes more than a year, as occurred to Adams’ application
here. We thus agree with our District Court colleague’s
decision to enjoin Secretary Richards from enforcing the Act’s
2
Additional procedural safeguards apply to permitting regimes
that involve content-based determinations. See Thomas v.
Chicago Park Dist., 534 U.S. 316, 322–23 (2002).
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permit requirement until there is set a time limit that satisfies
the First Amendment.3
* * * * *
The Interchange Prohibition conveys clearly what it
prohibits, so we affirm the District Court’s dismissal of
Adams’ vagueness challenge. We also affirm the entry of an
injunction barring enforcement of the permitting requirements
under 36 Pa. Stat. § 2718.107 until PennDOT establishes
reasonable time limits for its permit decisions, as required by
the First Amendment. But we reverse and remand on Adams’
challenge to the Interchange Prohibition based on First
Amendment scrutiny. Although that provision is not subject to
strict scrutiny—but rather “context-specific” scrutiny under
Rappa for on-premise “for sale or lease” signs and intermediate
scrutiny for on-premise signs as to activities on the property—
Secretary Richards bears the burden to justify the restraint it
imposes and the exemptions it provides. She has not done so
on the current record. On remand she will have that chance.
3
On appeal Adams argued that the District Court did not go far
enough in the injunctive remedy it granted, as it should have
ordered the Pennsylvania General Assembly to amend the
statute to add a time limit. Given that neither we nor the
District Court has the power to grant that relief, see Murphy v.
NCAA, 138 S. Ct. 1461, 1481–82 (2018), we reject Adams’
request and sustain the remedy crafted by the District Court.
In addition, the Court did not abuse its discretion just because
it did not award the relief that Adams thinks “should” have
been granted. Adams does not offer any reason why the
injunction was insufficient to remedy § 2718.107’s
unconstitutionality, and we see none.
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