Raymond Reudy v. Clearchannel Outdoor, Inc.

FILED
NOT FOR PUBLICATION APR 25 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
RAYMOND REUDY; MARK KEVIN No. 09-15986
HICKS, DBA Advertising Display
Systems, D.C. No. 3:02-cv-05438-SC
Plaintiffs - Appellants,
MEMORANDUM *
v.
CLEAR CHANNEL OUTDOOR, INC., a
Delaware corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of California
Samuel Conti, Senior District Judge, Presiding
Argued and Submitted November 5, 2010
Submission withdrawn November 9, 2010
Resubmitted April 18, 2011
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: ALARCÓN and RYMER, Circuit Judges, and KENNELLY, District
Judge.**
Raymond Reudy and Kevin Hicks, dba Advertising Display Systems
(“ADS”), filed this action in state court. Clear Channel Outdoor, Inc. (“Clear
Channel”) removed the matter to the United States District Court for the Northern
District of California based on diversity jurisdiction. ADS appeals from the district
court’s order denying its motion to remand and granting Clear Channel’s motion to
dismiss with prejudice its claims brought under California’s unfair competition
law, California Business & Professions Code § 17200 et seq. (the “UCL”). On
November 9, 2010, we issued an order vacating submission of this matter and
remanding to the district court for the limited purpose of requesting the district
court to enter an order clarifying the basis for the dismissal of this action with
prejudice. On November 29, 2010, in response to this Court’s order, the district
court filed an order clarifying that it had relied on California’s doctrine of equitable
abstention in dismissing this action with prejudice. On that basis, we affirm the
dismissal of this matter with prejudice.
I
ADS contends the district court erred in abstaining from reviewing the
**
The Honorable Matthew F. Kennelly, District Judge for the U.S. District
Court for Northern Illinois, Chicago, sitting by designation.
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merits of this action and dismissing it with prejudice. “We review whether the
requirements for abstention have been met de novo, and the district court’s
decision whether to abstain for an abuse of discretion.” S. Cal. Edison Co. v.
Lynch, 307 F.3d 794, 805 (9th Cir. 2002).
A court may abstain from employing the relief permitted by the UCL if (1)
“granting the requested relief would require a trial court to assume . . . or to
interfere with the functions of an administrative agency”; (2) “the lawsuit involves
determining complex economic policy, which is best handled by the Legislature or
an administrative agency”; or (3) “granting injunctive relief would be
unnecessarily burdensome for the trial court to monitor and enforce given the
availability of more effective means of redress.” Blue Cross of California, Inc. v.
Superior Court, 102 Cal. Rptr. 3d 615, 632 (Cal. Ct. App. 2009) (internal quotation
marks omitted).
The regulations governing outdoor advertising in San Francisco (the “City”)
are comprehensive. A grant of injunctive relief could interfere with the functions
of the City’s planning department. Furthermore, the City provides a remedy for
violations of its planning code through investigation and enforcement by its
planning department. See S.F. Plan. Code § 601 et seq. Because the City’s
regulation of outdoor signage is complex, granting injunctive relief would place an
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unnecessarily heavy burden on the district court to monitor and enforce the City’s
planning code.
Where a court abstains under the UCL, dismissal with prejudice is
appropriate. See, e.g., Alvarado v. Selma Convalescent Hosp., 64 Cal. Rptr. 3d
250, 253, 260 (Cal. Ct. App. 2007) (sustaining demurrer without leave to amend);
Shamsian v. Dep’t of Conservation, 39 Cal. Rptr. 3d 62, 69, 79 (Cal. Ct. App.
2006) (same). Accordingly, the district court did not abuse its discretion in
dismissing this action with prejudice.
II
ADS asserts that this action should have been remanded to state court under
Burford v. Sun Oil Co., 319 U.S. 315 (1943), or otherwise under “general
abstention principles.”
In United States v. Morros, 268 F.3d 695 (9th Cir. 2001), this Court held
that abstention is proper under the Burford doctrine if three elements are
established:
[F]irst, that the state has chosen to concentrate suits challenging the
actions of the agency involved in a particular court; second, that
federal issues [cannot] be separated easily from complex state law
issues with respect to which state courts might have special
competence; and third, that federal review might disrupt state efforts
to establish a coherent policy.
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Id. at 705.
California has not chosen to concentrate actions involving outdoor
advertising in a particular court. ADS’s claims involve questions of local law and
not federal issues. Investigation of violations and enforcement of the City’s
planning code do not present complex issues of state law requiring the special
competence of state courts but are rather matters best addressed by city
administrators. A state court is no better situated to determine Clear Channel’s
compliance with the City’s ordinances regulating outdoor signage than a federal
court. Finally, a determination of ADS’s claims by a state court would be equally
likely as that of a federal court to frustrate the City’s efforts to create a coherent
scheme governing outdoor advertising signs.
ADS has additionally failed to identify any “general abstention principles”
warranting remand. The district court properly exercised its discretion in denying
the motion to remand this matter.
AFFIRMED.
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