Sky Posters Inc. v. Dept. of Transportation

Filed 5/11/22 (unmodified opn. attached)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
SKY POSTERS INC., B304897
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BS173417)
v.
ORDER MODIFYING
DEPARTMENT OF OPINION
TRANSPORTATION,
NO CHANGE IN
Defendant and APPELLATE JUDGMENT
Respondent.
THE COURT:
The above-entitled opinion filed on May 10, 2022 is
modified as follows:
On page 1, add the following attorney information below
paragraph 3:
Kane Ballmer and Berkman, Royce K. Jones and Bruce C.
Gridley for City of Inglewood, as Amicus Curiae on behalf of
Petitioner and Appellant.
There is no change in the appellate judgment.
PERLUSS, P.J. SEGAL, J. FEUER, J.
Filed 5/10/22 (unmodified opinion)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
SKY POSTERS INC., B304897
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BS173417)
v.
DEPARTMENT OF
TRANSPORTATION,
Defendant and
Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, James C. Chalfant, Judge. Reversed and
remanded with directions.
Gary S. Mobley for Plaintiff and Appellant.
Erin E. Holbrook, Chief Counsel, Jerald M. Montoya,
Deputy Chief Counsel, and Alexander Prieto for Defendant and
Respondent.
__________________________
Sky Posters, Inc. appeals from a judgment entered after the
trial court denied in part its petition for writ of administrative
mandate pursuant to Code of Civil Procedure section 1094.5. In
2014 the California Department of Transportation (Caltrans)
issued notices to Sky Posters alleging violations of the Outdoor
Advertising Act (Bus. & Prof. Code,1 § 5200 et seq.; OAA) in
connection with two large advertising displays Sky Posters
erected on the walls of a 12-story office building adjacent to
Interstate 405 in Inglewood. A 30,000-square-foot display
advertised a new Nissan Rogue, and a 25,000-square-foot display
advertised an X-Men movie. Each display contained a 100-
square-foot tagline at the bottom of the advertising copy stating
the products were available at a specified business location.
After a formal hearing, the administrative law judge issued a
proposed decision affirming the violations and imposing
penalties. Caltrans adopted the proposed decision as its final
decision, and the trial court upheld the portion of the decision
sustaining the violations.
Sky Posters contends the advertising displays were lawful
under sections 5272 and 5273, which together exempt advertising
displays located within a redevelopment project area
(redevelopment displays)2 from the OAA as on-premises displays
if they advertise businesses conducted, services provided, or
goods sold or manufactured within the project area and meet
other specified requirements. The administrative law judge and
1 Undesignated statutory references are to the Business and
Professions Code.
2 We refer to advertising displays that qualify as “on-
premises” displays under section 5273 as redevelopment displays.
2
the trial court found these exemptions did not apply to the Sky
Posters advertising displays because the business location
taglines on the displays were visually dwarfed by the advertising
copy for the products3 purportedly available at those businesses
(one display showed a photograph of a 2015 Nissan Rogue; the
other showed images of characters from the X-Men film
franchise). The ALJ and trial court concluded it was clear from
the totality of the circumstances the displays advertised the
products, not the redevelopment-area businesses, to passing
motorists.
We conclude the administrative law judge and the trial
court applied erroneous legal standards in determining the
displays were not authorized under sections 5272 and 5273. In
view of the legislative history of section 5273 and the Caltrans
regulations interpreting the section, a redevelopment display
qualifies as an on-premises display exempt from the OAA’s
requirements under sections 5272 and 5273 if it advertises goods
or services that are not incidental or secondary to the principal
business activity of a business within the redevelopment project
area, provided the business location tagline complies with
minimum size standards set forth in section 5273, subdivision
(d).4 Nowhere in the statute or Caltrans’s implementing
regulations is there an additional requirement that the business
location tagline not be “visibly dwarfed” by the advertising copy
for the goods or services advertised. We reverse the judgment
3 We use the terms “goods” and “products” interchangeably.
4 The advertising display must also satisfy requirements for
approval, local business identification, and certification set forth
in section 5273, subdivisions (a) through (d).
3
and remand with instructions for the trial court to enter a writ of
administrative mandate directing Caltrans to vacate the
administrative decision and to direct the administrative law
judge to make findings under the correct legal standard.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Statutory Framework
The OAA governs the placement of off-premises advertising
displays within 660 feet of and visible from interstate highways
and other primary highways. (§§ 5270, 5271, 5405.) The OAA
generally prohibits anyone from placing an advertising display
without securing a written permit from Caltrans (§ 5350) and
paying a license fee (§ 5301). The law further restricts displays
adjacent to landscaped highways (§ 5440). However, the OAA
does not apply to an “on-premises” advertising display, which
includes a display used exclusively to advertise “business
conducted, services rendered, or goods produced or sold upon the
property on which the advertising display is placed.” (§ 5272,
subd. (a)(4); see § 5442, subd. (c) [requirements for advertising
display adjacent to landscaped highways do not apply to
advertising display used exclusively “[t]o advertise goods
manufactured or produced, or services rendered, on the property
upon which the advertising display is placed”].) On-premises
advertising displays are governed by a separate chapter of the
Business and Professions Code, which contains fewer restrictions.
(See §§ 5490-5499.)
In 1985 the Legislature enacted former section 5273 of the
OAA, providing that “advertising displays advertising those
businesses and activities developed within the boundary limits of,
4
and as part of, an individual redevelopment agency project may,
with the consent of the redevelopment agency governing the
project, be considered to be on the premises anywhere within the
limits of that project . . . .” (Stats. 1985, ch. 1448, § 1, p. 5144.)
In 2013 the Legislature enacted Senate Bill No. 684 (2013-
2014 Reg. Sess.) (Stats. 2013, ch. 544, § 1, p. 2) (Senate Bill 684),
which amended section 5273 following the dissolution of state
redevelopment agencies to provide additional requirements for
redevelopment displays in place of the former provision for
consent of the redevelopment agency. As amended, section 5273,
subdivision (a), now provides, “Notwithstanding the dissolution of
a state redevelopment agency . . . an advertising display
advertising the businesses and activities developed within the
boundary limits of, and as part of, an individual redevelopment
agency project, as those boundaries existed on December 29,
2011, may continue to exist and be considered an on-premises
display” if, in relevant part, the display was constructed on or
before January 1, 2012 and is located within a redevelopment
project area. (§ 5273, subd. (a)(1)-(2).)
Amended section 5273, subdivision (c), provides, “The
applicable city, county, or city and county shall be responsible for
ensuring that [a redevelopment display] is consistent with this
section and provides a public benefit.”5 Amended section 5273,
subdivision (d), requires the local governmental entity annually
to “certify to [Caltrans] that the advertising copy of the
advertising display is advertising businesses or activities
operating within the boundaries of the redevelopment project
5 Section 5273, subdivision (c), further states, “This provision
shall not be construed to preclude any enforcement authority of
[Caltrans] under [the OAA].”
5
area and that at least 10 percent of the advertising copy, up to a
maximum of 100 square feet, is used to display the address or
location or locations of the business or activity, or to identify the
route to the business or activity from the nearest freeway
offramp.” Caltrans “may independently review compliance with
this certification.” (Ibid.)
B. Sky Posters’s Inglewood Advertising Displays6
The advertising displays at issue are two very large vinyl
advertising displays affixed to the walls of a 12-story office
building at 9800 South La Cienega Boulevard in Inglewood (the
building). Michael McNeilly, Sky Posters’s president, testified
the displays are “some of the largest murals in the country.” The
building abuts Interstate 405, and the displays are visible from
the freeway. The building is within the boundaries of the Merged
Inglewood Redevelopment Project Area.
In 2010 Sky Posters entered a revenue-sharing agreement
with the City of Inglewood (City) to place advertising displays
approved by the Inglewood Redevelopment Agency on three faces
of the building (as well as on an adjacent parking garage), with
the City to receive 25 percent of gross advertising revenues. The
agreement was subsequently amended to address the dissolution
of the redevelopment agency, and under the amendment the City
would receive 40 percent of gross revenues. The agreement
specified that before installing or changing the advertising copy
on the displays, Sky Posters was required to submit the proposed
6 The background facts are taken from the testimony at the
administrative hearing and the administrative law judge’s
statement of decision. Other than where indicated, the facts are
not in dispute.
6
advertising copy and display specifications for City approval. In
2010 Sky Posters obtained written approval from Caltrans to
place redevelopment displays on the building.7
On December 19, 2013 Sky Posters applied for and
obtained a building permit from the City to place an
advertisement it described as “‘Nissan’” on the south and east
faces of the building, commencing on January 1, 2014 (the Nissan
display). Sky Posters’s contractor installed a 30,000 square foot
vinyl display—100 feet tall and 300 feet wide—over two faces of
the building. The advertising copy on each face stated, “The all-
new Nissan Rogue” and “Enjoy missing your next exit” in large
letters next to a large Nissan logo. (Capitalization omitted.) The
lion’s share of the advertisement comprised a photograph of a
2015 model year Nissan Rogue. At the bottom corner of the
display on one of the building walls, a 100-square-foot location
tagline appears to state, “Nissan Available at CarMax
3471 W. Century Blvd Inglewood CA 90303[.]”8
7 A party seeking to install a redevelopment display must file
a permit application with Caltrans demonstrating compliance
with section 5273, subdivision (a); however, once the application
has been approved, the display “shall be considered an on-
premise display and no permit will issue.” (Cal. Code Regs.,
tit. 4, § 2244.) Thereafter, the local government agency is
responsible for annually certifying to Caltrans that the
redevelopment display complies with section 5273,
subdivision (a). (§ 5273, subds. (d) & (e).)
8 The words on the location tagline on the Nissan display are
barely visible from the exhibit in the administrative record. We
cannot tell the extent to which the words would be visible to
someone driving by the sign. Further, the tagline provided an
inaccurate address for the CarMax facility. The hearing exhibits
7
On April 16, 2014 Sky Posters filed for and obtained a
building permit to place advertising it described as “‘X Men’” on
the north face of the building commencing April 17, 2014 (the X-
Men display). The X-Men display was 25,000 square feet—100
feet tall and 250 feet wide. The advertisement comprised large
images of four characters from the “X-Men” film franchise, and
printed across the bottom in large letters was the following: “X-
Men Days of Future Past” and “May 23[.]” (Capitalization
omitted.) At the bottom corner of the display, a 100-square-foot
location tagline stated, “Tickets Available @ Inglewood Tickets,
Located at 128 S. Market St., Inglewood CA[.]”
C. The Notices of Violation
On April 28, 2014 Caltrans issued separate violation
notices to Sky Posters for the Nissan and X-Men displays. Other
than the description of the displays, the notices were identical
and alleged the following OAA violations: failure to obtain a
permit to place advertising (§ 5350); failure to pay an outdoor
advertising license fee (§ 5301); failure to submit proof of the
property owner’s consent (§§ 5354, 5460); placement of an
advertising display adjacent to a landscaped freeway (§ 5440);
placement of advertising displays that do not advertise
businesses or activities in a redevelopment zone (§ 5273); and
violation of sign spacing requirements (§ 5408, subd. (a)). Sky
Posters timely appealed both notices and requested a formal
indicate the Inglewood CarMax is located at 8611 La Cienega
Boulevard. We take judicial notice that this address is at least
two miles from the address printed on the Nissan display.
However, Caltrans does not argue on appeal that use of an
incorrect address rendered the Nissan display unlawful.
8
hearing pursuant to California Code of Regulations, title 4,
section 2241, and Government Code section 11500.
Caltrans filed an accusation alleging the same violations
with a prayer for removal of the displays, as well as an
assessment of penalties and disgorgement of revenues under
section 5485, subdivisions (b) and (c).9 Sky Posters filed a notice
of defense, objecting on the grounds the accusation was vague
and did not state grounds for agency action, and asserting
13 affirmative defenses.
The Nissan display was removed around May 24, 2014, and
the X-Men display was removed around May 31, 2014. The City
received approximately $52,000 from gross revenues for the X-
Men display; there is no evidence in the record how much the
City received for the Nissan display.
Sky Posters continued, with City permits, to place
advertisements on the building walls at least through July 2015,
including 19 movie advertisements and one vehicle
advertisement. According to Inglewood Mayor James Butts, the
City’s agreement with Sky Posters generated more than
9 Section 5485, subdivision (b)(2), provides, “If the
advertising display is placed or maintained in a location that does
not conform to the provisions of this chapter or local ordinances,
and is not removed within thirty days of written notice from
[Caltrans or the local governmental entity] . . . , a penalty of ten
thousand dollars ($10,000) plus one hundred dollars ($100) for
each day the advertising display is placed or maintained after
[Caltrans] sends written notice shall be assessed.”
Subdivision (c) provides, “In addition to the penalties set forth in
subdivision (b), the gross revenues from the unauthorized
advertising display . . . shall be disgorged.”
9
$1 million in revenue for the City in 2014, and it helped fund the
graveyard shift of the City’s police department.
D. Disputed Evidence at the Administrative Hearing
Sky Posters’s requests for hearing were consolidated, and a
five-day hearing before an administrative law judge (ALJ)
commenced on July 6, 2015.10 Representatives of the City,
Caltrans, Sky Posters, and Sky Posters’s contractors testified.
The principal disputed issue was whether the displays qualified
as redevelopment displays under section 5273. Caltrans outdoor
advertising inspector Raj Champaneri opined that if the displays
qualified as redevelopment displays under section 5273, they
would not be in violation of the OAA.
1. The X-Men display and Inglewood Tickets
Inglewood city planner and economic and community
development manager Christopher Jackson was responsible for
approving the advertising copy and plans for each of Sky
Posters’s proposed displays and for making the City’s annual
certifications to Caltrans.11 Jackson testified there were no
10 ALJ Erlinda G. Shrenger with the Department of General
Services Office of Administrative Hearings presided over the
hearing and issued the proposed decision.
11 The City sent letters to Caltrans certifying that as of
December 31, 2013 and December 31, 2014, Sky Posters’s
displays were “advertising business[es] or activities within the
boundary of the Merged Inglewood Redevelopment Project Area
and that at least 10 percent, up to a maximum of 100 square feet,
is used to display the address or location or locations of the
advertised business(es) or activity(ies) . . . .”
10
businesses within the redevelopment project area that showed
first-run movies, but Inglewood Tickets was located within the
redevelopment project area and sold tickets to new movies.
Jackson made this determination by calling the owner of
Inglewood Tickets at some point prior to approving the X-Men
display and asking if tickets to new movies could be purchased at
the business. Jackson then visited Inglewood Tickets and found
a kiosk from which first-run movie tickets were available for sale.
Jerod Helt, a permit expediter retained by Sky Posters to
obtain approvals for the displays, testified that sometime after
Senate Bill 684 was passed in October 2013 he visited Inglewood
Tickets and took photographs of the kiosk, which he described as
“a computer in the lobby, and you could use that computer to
order the tickets.” The photographs were admitted into the
administrative record. The photographs show a two-story
commercial building with an awning stating “CONCERT ·
THEATRE · SPORTS” and a marquee listing musical
performers, a music festival, and two professional basketball
teams. A photograph of the interior of the ticket window for
Inglewood Tickets shows a service counter with a glass divider;
sitting on the counter on the public side of the divider stands a
computer with an advertisement for the movie “The Secret Life of
Walter Mitty” as its desktop wallpaper.
Champaneri, who issued the notices of violation, testified
he was not aware at the time he recommended action against the
X-Men display that the display included a tagline identifying
11
Inglewood Tickets on the bottom corner.12 Champaneri stated
Inglewood Tickets did not sell movie tickets. When asked how he
knew this, Champaneri said he contacted the business, although
he did not recall when, nor did he elaborate. Presented with a
series of hypothetical scenarios, Champaneri opined, “If the
tickets are available at that place, then I would think that
qualifies under the redevelopment criteria.”
McNeilly (Sky Posters’s president) testified Inglewood
Tickets had not paid anything to Sky Posters; instead, the movie
studio or its media agency paid for the X-Men display. McNeilly
had a “handshake type of an agreement” with the owner of
Inglewood Tickets approving Sky Posters’s use of the business
name on its displays, and the owner of Inglewood Tickets was
“very excited” to have the “free advertisement.”
2. The Nissan display and CarMax
Jackson testified that before approving the Nissan display,
he determined the Inglewood CarMax facility was within the
redevelopment project area and that CarMax sold model-year
Nissans. Jackson made the latter determination by visiting the
CarMax website, which indicated it was possible to purchase a
new Nissan through CarMax. When asked, “Did you look up to
see if the Inglewood location carried the Nissan Rogue for the
12 Champaneri took the photographs of the X-Men display
that were included with the violation notice. The Inglewood
Tickets location tagline is not visible in the bottom right corner of
the display in Champaneri’s photographs, but it is visible in the
photographs introduced by Sky Posters. Sky Posters argued the
display was still being erected and was incomplete when
Champaneri photographed it.
12
2015 year?,” Jackson answered, “No.” However, Jackson
requested an opportunity to clarify his answer, stating he
“[d]idn’t understand,” and when asked, “Did you ever confirm on
the CarMax website whether or not the Inglewood location
carried brand-new 2015 Nissan Rogues?” he answered, “Yes.”
Jackson did not print out the results of his website research.
Helt testified he visited the CarMax website and the
CarMax Inglewood facility during the week of the administrative
hearing (in July 2015) to determine whether it sold new Nissan
cars, and he concluded it did. A composite of multiple images
placed on a single page that Helt testified he captured from the
CarMax website was admitted at the hearing. The images show
a CarMax webpage with a pull-down menu labeled “Find a Car”
that listed “Used Cars,” “New Cars,” “All Cars,” and “Nationwide
Transfers.”13 At the bottom of the webpage was a “Contact Us”
tab that stated, “Contact LAX in Los Angeles” and “Visit Us,” and
listed the Inglewood CarMax’s address. The composite also
includes a photograph of a 2015 Nissan Rogue sitting in a
parking lot with a manufacturer’s window sticker, but Helt did
not testify where on the CarMax website he found the image and
whether the vehicle shown was available at the Inglewood
facility.
During his July 2015 visit to the Inglewood CarMax
facility, Helt took photographs of the vehicles on the lot, and a
composite of the photographs was also admitted. The
13 Caltrans submitted a printout of a CarMax web page which
Helt agreed was consistent with what he had found online when
searching for new cars. Helt acknowledged the printout indicated
only that new Nissans were available at a CarMax facility in
Washington, D.C. and Maryland.
13
photographs show at least five Nissan vehicles on the Inglewood
lot, and Helt testified the lot’s inventory included model year
Nissan Rogues. However, the only close-up photograph of a
vehicle at the Inglewood facility shows a “Carmax quality
certified” window sticker on a 2015 Nissan Altima. Helt testified
he had also visited the Inglewood CarMax on several prior
occasions, but he did not recall if he visited the facility in March
or April 2014. Helt recounted that on a previous occasion,
Jackson had asked him to call CarMax before installing an
advertising display for a Chrysler vehicle, and Helt called the
facility the same day and confirmed it had the advertised
Chrysler on the lot.
Champaneri testified he determined there were no Nissan
dealerships and no new Nissan Rogue vehicles available for sale
in the redevelopment project area. His determination was based
on calls with the City and his own online research. Champaneri
also photographed the CarMax facility’s sign adjacent to
Interstate 405, which stated, “Car Max [¶] Used Cars [¶] Exit
Manchester.” (Capitalization Omitted.)
McNeilly testified that either Nissan or its media agency,
not CarMax, paid for the Nissan display. The contract between
Sky Posters and Nissan or its agency would not have expressly
provided that Sky Posters intended to place a CarMax location
tagline on the Nissan display, but Sky Posters would have
informed the advertiser. Sky Posters did not have a written
agreement with CarMax, but McNeilly was informed that
CarMax verbally approved the use of its name on Sky Posters’s
displays for vehicle advertisements.
14
E. The Administrative Decision
On December 23, 2015 the ALJ issued a 20-page proposed
decision, which Caltrans adopted as its final decision on January
21, 2016 (the administrative decision). The ALJ found that in
issuing the violation notices, “Champaneri concluded that the
[s]ubject [d]isplays were not redevelopment displays advertising
businesses in the City’s redevelopment zone. In his investigation,
Champaneri did not find a Nissan dealership, or a movie theater
that showed first-run movies . . . .” However, “Jackson approved
the permit for the Nissan display after his review and research
concluded that the display was for an advertisement for a
business within the Inglewood redevelopment zone, namely
Carmax. . . . Jackson also reviewed Carmax’s website and
confirmed that new cars (i.e., model year vehicles) could be
purchased through Carmax.” As to the X-Men display, Jackson
did not locate any businesses that showed first-run movies in the
redevelopment project area, but he found a business “that sold
movie tickets, namely, Inglewood Tickets. Jackson contacted the
owner of Inglewood Tickets, who confirmed that Inglewood
Tickets sold movie tickets through a kiosk at its location.”
The ALJ found the evidence did not support Sky Posters’s
contention its displays qualified as redevelopment displays under
section 5273, subdivision (a), because, although they included
taglines showing the names and addresses of Inglewood Tickets
and CarMax, “[t]he taglines are visually dwarfed by the more
prominent and conspicuous images and text for the X-Men movie
and Nissan Rogue. Looking at the totality of each of the [s]ubject
[d]isplays, it is clear that what is being advertised or promoted to
passing motorists traveling on the 405 freeway is a first-run X-
Men motion picture and a model-year Nissan Rogue. Neither of
15
the [s]ubject [d]isplays can reasonably be construed as
advertising for Inglewood Tickets or Carmax, or the availability
of movie tickets and Nissan vehicles for sale at those respective
businesses.” Sky Posters’s contention was “further undermined
by the fact that neither of those businesses paid to have their
names and addresses advertised on the [s]ubject [d]isplays. . . .
There was no agreement between [Sky Posters] and Inglewood
Tickets or Carmax, to advertise the latter two businesses on [Sky
Posters’s] super graphic wall signs placed on the [b]uilding.” The
ALJ also found the displays did not qualify as on-premises
displays exempt from the OAA under section 5272,
subdivision (a)(4). She found, “The weight of the evidence does
not support [Sky Posters’s] contention that the [s]ubject
[d]isplays advertise movie ticket for sale at Inglewood
Tickets . . . , or cars that are available for sale at Carmax.”
The ALJ affirmed the violation notices and ordered Sky
Posters to pay $10,300 in penalties for the Nissan display under
section 5485, subdivision (b)(2), comprised of a penalty of $10,000
for failure to remove the display within 30 days of the violation
notice, plus $100 for each additional day the display remained.
No penalties were imposed as to the X-Men display because it
was removed within 30 days of the violation notice. However, the
ALJ ordered Sky Posters, pursuant to section 5485, subdivision
(c), to disgorge $129,868 in revenue it received from the X-Men
display. There was insufficient evidence to establish the gross
revenue Sky Posters received from the Nissan display, and thus,
no disgorgement was ordered as to that display.
The ALJ also made findings, not at issue on this appeal,
that Sky Posters’s placement of 20 subsequent displays on the
building were substantially similar to the subject displays, and
16
Caltrans was not required to issue a notice of violation for each
change in advertising copy. Sky Posters received approximately
$2.1 million in gross revenue for those displays, of which
40 percent was paid to the City. The ALJ therefore ordered Sky
Posters to disgorge 60 percent of those revenues, totaling
approximately $1.3 million.
Sky Posters filed a petition for reconsideration, arguing in
part that the ALJ effectively adopted a new standard for
qualification as a redevelopment display that was impermissibly
vague and inconsistent with section 5273, and further, the
disgorgement order was improper because the subsequent
advertising displays were not properly at issue. After a hearing
before Jasvinderjit Bhullar, Caltrans’s division chief for traffic
operations, on February 27, 2018 Caltrans affirmed the
administrative decision and adopted the proposed decision as its
final decision.
F. Petition for Writ of Administrative Mandate
On April 30, 2018 Sky Posters filed a petition for writ of
administrative mandate challenging the administrative decision.
Sky Posters alleged the Nissan and X-Men displays were lawfully
permitted redevelopment displays and the administrative
decision was contrary to law. In its supporting memorandum,
Sky Posters argued the ALJ failed to analyze whether the
displays met the criteria set forth in section 5273 and instead
based her decision upon her findings the business location tagline
was “‘visibly dwarfed’” by the images and text for the advertised
product, and the local businesses did not pay for the
advertisements. Sky Posters asserted the “‘visibly dwarfed’”
standard was directly contrary to section 5273, subdivision (d),
17
which specifies only that “10% of the advertising copy, up to a
maximum of 100 square feet, be used to display the address or
location” of the local business. Sky Posters also challenged the
disgorgement order.
In its opposition, Caltrans argued the plain meaning of
section 5273, subdivision (d), was that the business location
tagline must both take up at least 10 percent of the
advertisement and not exceed 100 square feet; thus, “an
advertisement within this section cannot be more than
1,000 square feet.” Caltrans also argued the ALJ’s analysis
whether the Nissan and X-Men displays qualified as
redevelopment displays was consistent with the analysis
employed by the Court of Appeal in People ex rel. Dept. of
Transportation v. Maldonado (2001) 86 Cal.App.4th 1225, 1229
(Maldonado) to determine whether a billboard was an on-
premises display exempt from the OAA under section 5272. The
court in Maldonado concluded the businesses advertised on the
display did not conduct business on the property where the
display was located, or the activities conducted on the property
were merely incidental to the advertised businesses, and thus,
the display did not qualify as an on-premises display. (Id. at
pp. 1231-1232, 1235.)
After a hearing, on October 24, 2019 the trial court granted
the petition in part, directing Caltrans to set aside the
disgorgement order for the 20 displays installed after the X-Men
and Nissan displays were removed. The court denied the petition
in all other respects, accepting Caltrans’s interpretation of
section 5273, subdivision (d). The court explained, “[I]t says at
least 10%, up to a maximum of 100 square feet. These are
minimum and maximum conditions and both conditions must be
18
met. There must be at least 10% of the square footage devoted to
the tagline and the tagline can be a maximum of 100 square feet.
A tagline that is less than 10% of the sign but is 100 square feet
does not qualify as a redevelopment display.” (Underlining
omitted.) Further, “[t]his plain meaning interpretation is
consistent with the purpose of the [OAA], which is to regulate off-
premise advertising displays. . . . Section 5273 authorizes signs
in a redevelopment area that direct freeway travelers to a
redevelopment business or activity. This purpose is not served if
the tagline were permissibly a small part of a large sign. Indeed,
redevelopment signs could swallow the [OAA]’s regulation of off-
premise signage in redevelopment areas, as [Sky Posters’s] signs
did in this case.”
The trial court also found substantial evidence supported
the ALJ’s finding the displays did not meet section 5273’s criteria
for advertising businesses and activities within the
redevelopment project area because the location taglines were
“‘visibly dwarfed’” by the advertisements for the X-Men movie
and Nissan Rogue; neither Nissan or the movie’s distributor had
business in the redevelopment area; and CarMax and Inglewood
Tickets did not pay to have their names advertised. The court
reasoned, “It is not enough to say in a tagline that a product can
be purchased locally. There is no difference between Sky
Posters’s argument that the car and movie tickets may be
purchased at local CarMax and Inglewood Tickets, respectively,
and a billboard advertising Milky Way candy bars with a tagline
that they can be purchased at a local grocery store. The billboard
is advertising the product (Milky Way), not the location where it
can be purchased. This does not meet section 5273(a)’s
requirement of a sign advertising the businesses and activities of
19
the redevelopment area.” Further, analogizing to Maldonado,
supra, 86 Cal.App.4th at page 1231, the trial court concluded
“[t]he fact that tickets for the X-Men movie and the Nissan car
model may be purchased from a local business does not make the
sign’s advertisement of the movie and car into a redevelopment
display.”
On January 9, 2020 the trial court entered a judgment
granting a peremptory writ of mandate as to the disgorgement
order, but denying the writ as to the ALJ’s determination the
redevelopment displays did not qualify as on-premises displays
under sections 5272 and 5273. Sky Posters timely appealed.
DISCUSSION
A. Standard of Review
Code of Civil Procedure section 1094.5 provides for judicial
review of administrative orders and decisions. (Topanga Assn.
for a Scenic Community v. County of Los Angeles (1974) 11 Cal.3d
506, 514; Schmid v. City and County of San Francisco (2021)
60 Cal.App.5th 470, 483 (Schmid).) “‘Pursuant to Code of Civil
Procedure section 1094.5, subdivision (b), “[t]he inquiry in such a
case shall extend to the questions whether the respondent has
proceeded without, or in excess of, jurisdiction; whether there
was a fair trial; and whether there was any prejudicial abuse of
discretion. Abuse of discretion is established if the respondent
has not proceeded in the manner required by law, the order or
decision is not supported by the findings, or the findings are not
supported by the evidence.”’” (Schmid, at pp. 483-484; accord,
Doe v. University of Southern California (2018) 28 Cal.App.5th
26, 34.) The writ petitioner has “‘“the burden of proving that the
20
agency’s decision was invalid and should be set aside, because it
is presumed that the agency regularly performed its official
duty.”’” (Schmid, at p. 484.)
“On appeal from the judgment on a petition for writ of
administrative mandate in a case not involving fundamental
vested rights[14] . . . we review the agency’s findings, not the
superior court’s decision, for substantial evidence.” (Doe v.
University of Southern California, supra, 28 Cal.App.5th at p. 34;
see Doe v. Regents of University of California (2016)
5 Cal.App.5th 1055, 1072 [“‘An appellate court in a case not
involving a fundamental vested right reviews the agency's
decision, rather than the trial court’s decision, applying the same
standard of review applicable in the trial court.’”].) However, we
14 Where an agency decision affects the petitioner’s
fundamental vested right, the trial court exercises independent
judgment in assessing whether the evidence is sufficient to
support the agency’s findings. (Schmid, supra, 60 Cal.App.5th at
p. 484; Young v. City of Coronado (2017) 10 Cal.App.5th 408,
418.) Sky Posters does not challenge the trial court’s
determination Sky Posters’s “economic interest in the permits to
erect [the subject] redevelopment displays is insufficient to create
a vested fundamental right” and its “primary business is in
selling posters, not advertising, and Caltrans’[s] decision would
not drive it out of business or significantly injure its ability to
function.” (See JKH Enterprises, Inc. v. Department of Industrial
Relations (2006) 142 Cal.App.4th 1046, 1061 [“‘Administrative
decisions which result in restricting a property owner’s return on
his property, increasing the cost of doing business, or reducing
profits are considered impacts on economic interests rather than
on fundamental vested rights.’”].) We agree Sky Posters did not
have a fundamental vested right in maintenance of the
redevelopment displays.
21
independently review legal determinations by the agency or the
trial court. (Schmid, supra, 60 Cal.App.5th at p. 485 [“legal
issues present a question of law that this court reviews de novo
on appeal”]; Valero Refining Co.—California v. Bay Area Air
Quality Management District Hearing Board (2020)
49 Cal.App.5th 618, 637 [“In reviewing an agency’s decision on a
question of law ‘“‘the trial and appellate courts perform
essentially the same function, and the conclusions of the trial
court are not conclusive on appeal.’”’”].)
B. The Trial Court Erred in Interpreting Section 5273,
Subdivision (d), To Limit the Size of Redevelopment
Displays
Sky Posters contends the trial court erred in adopting
Caltrans’s interpretation of the requirement in section 5273,
subdivision (d), that the tagline for the location of the business be
“at least 10 percent of the advertising copy, up to a maximum of
100 square feet,” to mean the business location tagline must be at
least 10 percent of the size of the advertisement and be no more
than 100 square feet, thereby limiting the redevelopment display
to 1,000 square feet. The plain meaning of section 5273,
subdivision (d), supports Sky Posters’s position the statute
imposes no such limit, as does the statutory context and
legislative history.
“We review questions of statutory construction de novo.’”
(California Building Industry Assn. v. State Water Resources
Control Bd. (2018) 4 Cal.5th 1032, 1041; accord, Wang v. City of
Sacramento Police Department (2021) 68 Cal.App.5th 372, 378.)
“As with any question of statutory construction, our core task
here is to determine and give effect to the Legislature’s
22
underlying purpose in enacting the statutes at issue. [Citations.]
We first consider the words of the statutes, as statutory language
is generally the most reliable indicator of legislation’s intended
purpose. [Citation.] We consider the ordinary meaning of the
relevant terms, related provisions, terms used in other parts of
the statute, and the structure of the statutory scheme. [Citation.]
If the relevant statutory language is ambiguous, we look to
appropriate extrinsic sources, including the legislative history,
for further insights.” (McHugh v. Protective Life Ins. Co. (2021)
12 Cal.5th 213, 227; accord, Jarman v. HCR ManorCare, Inc.
(2020) 10 Cal.5th 375, 381.)
In construing a statute, we give deference to an agency’s
interpretations of the statutory language “to the extent that those
interpretations are embodied in quasi-legislative regulations or
constitute long-standing, consistent, and contemporaneous
interpretations.” (McHugh, supra, 12 Cal.5th at p. 227, citing
Yamaha Corp. of America v. State Bd. of Equalization (1998)
19 Cal.4th 1, 7 [“[U]nlike quasi-legislative regulations adopted by
an agency to which the Legislature has confided the power to
‘make law,’ and which . . . bind this and other courts as firmly as
statutes themselves, the binding power of an agency’s
interpretation of a statute or regulation is contextual: Its power
to persuade is both circumstantial and dependent on the presence
or absence of factors that support the merit of the
interpretation.”]; see Maldonado, supra, 86 Cal.App.4th at
p. 1232 [“As the agency charged with administration of the
[OAA], Caltrans’s construction thereof is entitled to great
weight.”].)
We read the statutory language “at least 10 percent of the
advertising copy, up to a maximum of 100 square feet” in a
23
commonsense manner to set the maximum required size of the
business location tagline (100 square feet) regardless of the
display’s size. The use of commas surrounding the phrase “up to
100 square feet” indicates the phrase modifies the antecedent
phrase, “at least 10 percent.” Thus, the business location tagline
must be at least 10 percent of the advertising copy, but the
tagline is not required to be larger than 100 square feet.
Accordingly, both the 30,000-square-foot Nissan display and the
25,000-square-foot X-Men display were required to have at least
a 100 square-foot business location tagline, as would any display
that is 1,000 square feet or larger.
Section 5273, subdivision (d), cannot reasonably be
interpreted as imposing a 1,000 square foot overall size limit on
redevelopment displays. Had the Legislature intended to limit
redevelopment displays to 1,000 square feet, it could have simply
said so directly in section 5273, subdivision (d), rather than
indirectly by applying a mathematical constraint, specifically,
requiring the use of algebra to calculate that a 100 square-foot
tagline can only meet the 10 percent requirement if the entire
display is no larger than 1,000 square feet. (See, e.g., Unisys
Corp. v. California Life & Health Ins. Guarantee Assn. (1998)
63 Cal.App.4th 634, 639 [rejecting proposed interpretation of
coverage exclusions from a provision of the Life and Health
Insurance Guaranty Act that constituted “a remarkably
convoluted way for the Legislature to make a point that could
readily be stated with utmost clarity”].)
Moreover, Caltrans has not adopted regulations or an
agency interpretation of section 5273, subdivision (d), that
imposes a 1,000 square-foot limitation on redevelopment
displays. Notably, Caltrans never asserted in the violation
24
notices, accusation, hearing briefs, or administrative review
process that the Nissan and X-Men displays—30,000 and
25,000 square feet, respectively—violated the OAA because they
exceeded 1,000 square feet. To the contrary, Champaneri
testified in response to several hypothetical questions that had
the subject displays identified a Nissan dealership or a first-run
movie theater, the displays would qualify under the criteria for a
redevelopment display.
The legislative history of section 5273 supports our
interpretation. Prior to enactment of Senate Bill 684 in 2013,
section 5273 did not include any provision addressing the size or
content of the required business location tagline, and it did not
limit the overall size of redevelopment displays. As described in
the Senate Rules Committee’s analysis of Senate Bill 684, under
the then-existing framework, “[t]he [OAA] regulates the size,
illumination, orientation, and location of advertising displays
adjacent to and within specified distances of interstate or
primary highways,” but “[l]ocal government regulates on-premise
displays, except for certain safety requirements.” (Sen. Rules
Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill
No. 684 (2012-2013 Reg. Sess.) as amended May 15, 2013, pp. 2-
3.) According to the Senate Rules Committee’s analysis, Senate
Bill 684 was designed to amend the redevelopment agency
exemption to the OAA to address the elimination of
redevelopment agencies and “[p]lace[] the responsibility on the
designated successor agency for ensuring these advertising
displays are advertising qualifying businesses, are otherwise
being operated lawfully, and remain in the public’s best interest.”
(Ibid.) Nowhere in the legislative history is there a discussion of
25
an intent to impose a statewide limitation on the overall size of a
redevelopment display.
The trial court reasoned that its interpretation of
section 5273, subdivision (d), was consistent with the broader
purpose of the OAA in controlling signage on freeways, and
“[t]his purpose is not served if the tagline were permissibly a
small part of a large sign.” Although it is true that a miniscule
business location tagline would not advance the goal of Senate
Bill 684 to direct traffic to the redevelopment businesses,15 it is
reasonable to assume the Legislature believed a 100 square foot
tagline was sufficiently large to accomplish that goal. Further,
we recognize that Sky Posters is utilizing a loophole created by
section 5273, which allows redevelopment displays to qualify as
on-premises displays not subject to the OAA even though they
are not on the premises, while the same displays if located near
the highway but not in the redevelopment zone (and not on the
premises) would be governed by the OAA. But it is not for us to
second guess the Legislature’s intent in 1985 to create an
exception for redevelopment displays to qualify as on-premises
15 The Senate Rules Committee Analysis of Senate Bill 684
states, “According to proponents, legislation created the
redevelopment exemption to the OAA to allow businesses in these
less-desirable places to advertise for two reasons. First, travelers
on the landscaped freeway who may have been reluctant to
frequent the businesses in the area because of the perceived
blight would consider doing so as redevelopment investment
helped address the blight issues. Second, this new advertising
opportunity could be an additional tool to help a struggling
business in the project area become more successful.” (Sen. Rules
Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill
No. 684 (2012-2013 Reg. Sess.) as amended May 15, 2013, p. 3.)
26
displays as long as they advertised businesses or activities in the
redevelopment project area and the redevelopment agency
consented to the display, then to modify the exception in 2013 to
set minimum requirements for the size of the tagline identifying
the business location.16
C. The ALJ Used an Erroneous Legal Standard To Determine
Whether the Displays Advertised a Business in the
Redevelopment Project Area
Sky Posters contends the ALJ and the trial court, in
focusing on the size of the business location tagline and overall
display, failed to apply the correct legal standard under
section 5273, which required the ALJ to determine whether the
products and services advertised on the X-Men and Nissan
16 In 2016 the Legislature adopted Senate Bill No. 1199
(2015-2016 Reg. Sess.) (Stats. 2016, ch. 869, § 1, p. 2.), adding
section 5273.1 to the OAA. The new section applies only to
advertising displays “adjacent to Interstate 405 and located at
either postmile 22.36L or 22.38L north of Century Boulevard”—
the precise location of the subject displays. (§ 5273.1, subd.
(a)(3).) It provides that displays advertising “businesses and
activities within the boundary limits of the City of Inglewood may
continue to exist and advertise businesses or activities operating
outside the redevelopment project area.” (§ 5273.1, subd. (a).) As
described in the Senate Rules Committee’s analysis of Senate
Bill No. 1199, “[i]f this bill were passed, Sky Posters would likely
be permitted to continue displaying the two wall posters at
issue.” (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading
analysis of Sen. Bill No. 1199 (2015-2016 Reg. Sess.) as amended
April 26, 2016, p. 4.) The bill was adopted before Caltrans
asserted section 5273, subdivision (d), limits the size of
redevelopment displays to 1,000 square feet.
27
displays were sold in the redevelopment zone. Sky Posters is
partially correct. We read section 5273 to require the advertised
products and services be sold in the redevelopment project area,
but in addition, their sale must not be merely incidental to the
business located in the redevelopment project area. The ALJ
failed to make these findings.
Multiple sections of the OAA and related statutes support
our construction. As discussed, section 5273, subdivision (a),
classifies “an advertising display advertising the businesses and
activities developed within the boundary limits of, and as a part
of, an individual redevelopment agency project” as an “on-
premises display, as defined in Section 5490.” Section 5490,
subdivision (b)(2), in turn, defines an “on-premises advertising
display[]” to include a display intended “[t]o advertise the
business conducted, services available or rendered, or the goods
produced, sold, or available for sale, upon the property where the
advertising display has been lawfully erected.” And section 5272,
subdivision (a)(4), exempts from regulation under the OAA on-
premises displays that are used “exclusively” to advertise “the
business conducted, services rendered, or goods produced or sold
upon the property on which the advertising display is placed.”
In harmonizing these provisions, we construe section 5273,
subdivision (a), to extend the perimeter of the area in which a
display is considered an on-premises display from the actual
location of the display to the entire redevelopment project area,
as long as the display meets the requirements of section 5273 for
a redevelopment display and those of an on-premises display
28
under section 5272 (consistent with section 5490).17 (See Leider
v. Lewis (2017) 2 Cal.5th 1121, 1135 [“We construe terms in
17 We invited the parties to file supplemental letter briefs
addressing the significance, if any, of the difference between
section 5272’s inclusion as an on-premises display of an
advertising display that advertises “the business conducted,
services rendered, or goods produced or sold upon” a property,
and section 5273’s inclusion as an on-premises display of a
redevelopment display that advertises “the businesses and
activities developed within” a redevelopment project area, and
further, whether the Legislature intended by using the language
in section 5273 to narrow the scope of advertising displays that
qualify as on-premises displays. Caltrans stated in its
supplemental letter brief, consistent with the position of Sky
Posters, that “section 5273 did not intend to create a narrower
definition of on-premises displays as defined in section 5272.” We
agree. Although the language in section 5273 differs slightly
from that in section 5272 (referring to “activities” instead of
“services rendered” and “goods produced or sold upon”), there is
no indication in the legislative history of Senate Bill No. 897
(1985-1986 Reg. Sess.), which added section 5273, or Senate Bill
684 (2013-2014 Reg. Sess.), which in 2013 amended section 5273,
that the Legislature intended to modify the requirements for an
advertising copy to qualify as an on-premises display. Rather,
the legislative history reflects only a legislative intent to expand
the boundaries of where an advertising display may be placed (in
the entire redevelopment project area) to qualify as an on-
premises display. As the Senate Rules Committee’s analysis of
Senate Bill No. 897 explained, the bill constituted “a relaxation of
current law, which permits such signs only if they advertise
businesses or activities conducted immediately upon the property
where the display is located.” (Sen. Rules Com., Off. of Sen. Floor
Analyses, Unfinished Business Analysis of Sen. Bill No. 897
(1985-1986 Reg. Sess.) as amended by Assembly Sept. 9, 1985, p.
2.)
29
context, harmonizing the statutes both internally and with each
other to the extent possible”]; Pacific Palisades Bowl Mobile
Estates, LLC v. City of Los Angeles (2012) 55 Cal.4th 783, 805 [“‘A
court must, where reasonably possible, harmonize statutes,
reconcile seeming inconsistencies in them, and construe them to
give force and effect to all of their provisions’”].)
Moreover, because Caltrans is the entity charged with
administration and enforcement of the OAA (§ 5250), its
construction of the requirements for an on-premises display
under section 5272 is entitled to substantial weight. (Maldonado,
supra, 86 Cal.App.4th at p. 1232; see McHugh, supra, 12 Cal.5th
at p. 227.) Under Caltrans’s implementing regulations for on-
premises displays, a display does not qualify as an on-premises
display under section 5272 if the display “advertises a brand
name, trade name, product or service only incidental to the
principal activity conducted on the property, or from which the
business or property owner derive rental income.” (Cal. Code
Regs., tit. 4, § 2243, subd. (c).)
Maldonado, supra, 86 Cal.App.4th at pages 1230 to 1231,
which interpreted the comparable provisions for on-premises
advertising along landscaped freeways under sections 5440 and
5442 of the OAA, is instructive.18 There, the Court of Appeal
considered whether a billboard with advertisements placed on
the roof of an office building qualified as an allowable on-
premises display where the advertised businesses leased small
18 Section 5442, subdivision (c), exempts specified advertising
displays on landscaped freeways from regulation under section
5440 if the advertising display is used exclusively “[t]o advertise
goods manufactured or produced, or services rendered, on the
property upon which the advertising display is placed.”
30
offices in the building but did not sell the advertised products in
the building. (Id. at p. 1229.) The court explained that
“[w]hether a sign is a permissible outdoor advertising display is
not determined by the subjective intent of the property owner but
is a conclusion drawn from objective facts.” (Id. at 1231.) In
reviewing the facts presented in the Caltrans abatement action
at issue, the court considered whether the advertisers met the
requirements for a permissible advertising display under section
5542, subdivision (b) (that the display designate the “occupant of
the premises upon which the advertising display is placed”), or
subdivision (c) (that the display be used exclusively “[t]o
advertise goods manufactured or produced, or services rendered,
on the property upon which the advertising display is placed”), by
applying the Caltrans regulation that requires the display not
advertise a “product or service only incidental to the principal
activity conducted on the property.” (Maldonado, at pp. 1230-
1232, quoting Cal. Code Regs., tit. 4, § 2243, subd. (c).)
The Maldonado court found the advertisements at issue—
for a hotel, athletics team, cellular service company, and a
jeweler—did not advertise on-premises businesses or their
products or services because only two of the advertisers utilized
leased office space in the building; the two used the space for
purposes unrelated to the advertisements; and the advertised
goods and services were not available for purchase in the
building. (Maldonado, supra, 86 Cal.App.4th at p. 1231.) For
example, the court concluded as to the advertisement by Stanford
University for its football season, “The billboard advertised the
Stanford football season and contained a telephone number for
the ticket office at the football stadium . . . . [But] Stanford did
not operate a ticket office in its office in appellant’s building.”
31
(Id. at p. 1229.) As the court explained, “Patently conveyed in the
language of the [OAA] is the requirement that there be a direct,
ongoing, substantial relationship between the advertisement and
the property on which it is located, so that people visiting the
building will be able to obtain therein the goods and/or services in
the advertisement. (Id. at p. 1232.) The court issued an
injunction prohibiting the building owner from displaying
advertising “‘for products or services which are only incidental or
secondary to the principal business activity conducted on [his]
premises.’” (Id. at 1234.)
We apply the approach in Maldonado to redevelopment
displays under section 5273, subdivision (a), and conclude under
that section and Caltrans’s implementing regulations, a
redevelopment display only qualifies as an on-premises display
exempt from the OAA requirements if the display advertises
businesses or activities within the redevelopment project area
that are not “incidental or secondary to the principal business
activity” of the business. (Maldonado, supra, 86 Cal.App.4th at
p. 1234; see Cal. Code Regs., tit. 4, § 2243, subd. (c).)
The ALJ failed to engage in the proper analysis here.
Instead of analyzing whether the sale of model-year Nissans was
incidental to CarMax’s Inglewood business or whether the sale of
X-Men tickets was incidental to Inglewood Tickets’ business, the
ALJ instead concluded only that the taglines identifying
Inglewood Tickets and CarMax were not sufficiently large to
qualify the subject displays as on-premises displays because the
location taglines were “visually dwarfed by the more prominent
and conspicuous images and text for the X-Men movie and Nissan
Rogue,” and “looking at the totality of each [display], it is clear
that what is being advertised or promoted to passing motorists
32
traveling on the 405 freeway is a first-run X-Men motion picture
and a model-year Nissan Rogue.”
Moreover, as Sky Posters argues, the ALJ’s analysis draws
a categorical distinction between the business (allowed on a
redevelopment display) and the products or services sold at the
business (allowed only if they do not predominate the advertising
copy). Such a categorical distinction does not find support in the
statutes or Maldonado. Under the logic of the administrative
decision, it would make no difference if the location tags had
instead identified a Nissan dealership and a movie theater
showing “X-Men,” because the lion’s share of the advertising copy
focused on the products and their trademarks rather than the
businesses. But new movie advertisements and new vehicle
advertisements (as services or goods produced or sold) are not
merely incidental or secondary to the principal business activity
conducted on the premises of first-run movie theaters and Nissan
dealerships. (Cf. Maldonado, supra, 86 Cal.App.4th at pp. 1231-
1232 [Stanford did not operate a ticket office on the premises of
the billboard advertising its football games].)
In affirming the ALJ’s analysis, the trial court reasoned
there was no difference between the Nissan and X-Men displays
and “a billboard advertising Milky Way candy bars with a tagline
that they can be purchased at a local grocery store.” We do not
find this analogy persuasive. A closer analogy to the present case
would be a billboard advertisement for a signature sandwich with
a tagline directing motorists to a national fast-food franchise in
the redevelopment project area. To prove a violation, Caltrans
would need to show the promotion of the sandwich was secondary
or incidental to the local franchise restaurant’s business, which
would depend on whether the sale of the sandwich was related to
33
the core function of the business. One relevant factor would be
whether the promotion or consumer traffic generated by the
promotion was of economic significance to the local franchise
restaurant. If the fast-food franchise was in the business of
selling sandwiches, or if the sale of sandwiches generated a
significant percentage of the franchise’s sales, the promotion
would likely not be secondary or incidental to the franchise’s
business.19
D. The ALJ Must Make Findings Under the Correct Legal
Standard for a Redevelopment Display
The ALJ failed to make findings sufficient to adjudicate
whether the subject displays qualified as redevelopment displays
under the correct legal standard. Because the ALJ applied the
wrong standard, we cannot infer any findings in support of the
administrative decision. As the Supreme Court explained in
Topanga Assn. for a Scenic Community v. County of Los Angeles,
supra, 11 Cal.3d at page 515, “[I]mplicit in section 1094.5 is a
requirement that the agency which renders the challenged
decision must set forth findings to bridge the analytic gap
between the raw evidence and ultimate decision or order. . . .
Reference, in section 1094.5, to the reviewing court’s duty to
compare the evidence and ultimate decision to ‘the
19 The ALJ’s analysis was also erroneous to the extent it
placed significance on the fact CarMax and Inglewood Tickets did
not pay for the displays or enter into advertising contracts with
Sky Posters. An advertisement on a display could be significant
to a local business regardless of whether payment for the
advertisement is made by, for example, a movie studio or
automaker, instead of the local business.
34
findings’ . . . leaves no room for the conclusion that the
Legislature would have been content to have a reviewing court
speculate as to the administrative agency’s basis for decision.”
(Accord, Saad v. City of Berkeley (1994) 24 Cal.App.4th 1206,
1214 [“In Topanga . . . , the California Supreme Court announced
that the findings requirement of Code of Civil Procedure
section 1094.5 was real and that the reviewing courts should no
longer imply findings to support the administrative
determination where such findings were not made.”].)
With respect to the Nissan display, the ALJ made findings
that Caltrans inspector Champaneri investigated and found no
Nissan dealerships in the redevelopment project area, while
Jackson, the City’s planner, “reviewed Carmax’s website and
confirmed that new cars (i.e., model year vehicles) could be
purchased through Carmax.” Neither of these findings addressed
whether 2015 Nissan Rogues were available from the CarMax
Inglewood facility in April 2014. Jackson gave inconsistent
testimony as to whether he checked the CarMax website for the
availability of Rogues or even new Nissans at the Inglewood
location. Helt, Sky Posters’s permit expediter, testified the
Inglewood location sold 2015 Rogues at the time of the
administrative hearing in July 2015, but his photographs of the
CarMax website and the Inglewood facility are ambiguous, and
they suggest new Nissans may only have been available from a
different CarMax facility in Washington, D.C., or Maryland
through an arrangement with a licensed Nissan dealership. The
ALJ did not probe the nature of CarMax’s Inglewood business or
address the credibility of these witnesses and the contradictory
testimony. To determine whether the sale of the new model-year
Nissan Rogue was incidental or secondary to CarMax’s business,
35
the ALJ, at a minimum, needed to make findings on whether the
vehicle was available for sale at the Inglewood CarMax
dealership.
With respect to the X-Men display, the ALJ made a finding
Jackson investigated and determined that “Inglewood Tickets
sold movie tickets through a kiosk at its location.” However,
Champaneri testified he had “contacted” Inglewood Tickets at
some point and determined they did not sell first-run movie
tickets. In addition to this conflicting testimony, the photographs
of the facility, including the exterior marquee and interior lobby,
suggest the business was primarily engaged in the sale of tickets
to live events, and the kiosk for movie tickets may have simply
been a computer set up in the lobby that visitors could use to buy
movie tickets online. Findings relevant to the determination
whether the X-Men display qualified as a redevelopment display
would include not only whether X-Men tickets were available at
the Inglewood Tickets facility, which seems technically to have
been true in the same way they are available on any computer or
smartphone, but also whether, for example, Inglewood Tickets
generated commissions on the sale of new movie tickets through
the kiosk or the kiosk generated significant business traffic for
Inglewood Tickets such that ticket sales to new movies can fairly
be deemed not to be secondary to its live-events ticket business.
36
DISPOSITION
The judgment is reversed. The matter is remanded with
directions for the trial court to issue a writ directing Caltrans to
set aside the administrative decision and to direct the ALJ to
make findings whether products advertised on the subject
displays were available for sale at the identified redevelopment
businesses and whether their sale was secondary or incidental to
the primary business of the redevelopment businesses. The
parties are to bear their own costs on appeal.
FEUER, J.
We concur:
PERLUSS, P. J.
SEGAL, J.
37