Reudy et al v. Clearchannel Outdoor, Inc.

Filing 347

ORDER clarifying basis of dismissal in response to 346 (sclc1, COURT STAFF) (Filed on 11/29/2010)

Reudy et al v. Clearchannel Outdoor, Inc.

Doc. 347

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For the Northern District of California

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

RAYMOND REUDY and MARK KEVIN HICKS, DBA Advertising Display Systems, Plaintiffs, v. CLEAR CHANNEL OUTDOOR, INC., a Delaware corporation, Defendant.

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) Case No. 02-5438 SC ) ) ORDER CLARIFYING BASIS OF ) DISMISSAL WITH PREJUDICE ) ) ) ) ) ) ) )

The Ninth Circuit requested that this Court issue an order clarifying the basis of its April 24, 2009 dismissal with prejudice of the above-titled action. ECF No. 346 ("Nov. 9, 2010 Order").

The Court issues this order in response. Plaintiffs Raymond Reudy, Kevin Hicks, and Advertising Display Systems ("Plaintiffs") commenced this action in January 2002. No. 1 ("Notice of Removal"). ECF

Plaintiffs, who were engaged in the

business of leasing outdoor advertising signs and billboards in the San Francisco Bay Area, brought an action in California state court against fellow outdoor advertiser Clear Channel Outdoor, Inc. ("Defendant"). See ECF No. 312 ("Apr. 24, 2009 Order") at 2.

Plaintiffs alleged that Defendant operated signs and billboards throughout the City of San Francisco ("the City") in violation of the City's Planning and Building Codes, and contended that the

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For the Northern District of California

operation of these signs constituted an unfair business practice under California state law. federal court. Id. Defendant removed the action to

See Notice of Removal.

The Court stayed the action twice under California's doctrine of primary jurisdiction, noting that a court order could displace "local agencies without first giving them the opportunity to address Plaintiffs' contentions." Apr. 24, 2010 Order at 3.

During the pendency of the action, the City established the General Advertising Sign Program ("GASP"), a city agency charged with enforcing the City's sign regulations and removing illegal signs. Id. at 8-9. By 2008, GASP had identified 261 signs that did not

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comply with City regulations and had overseen removal of 141 of these signs. Id. at 10. By 2009, Plaintiffs had withdrawn all

requests for relief except one: an injunction requiring Defendant to remove nearly four hundred signs that allegedly violated the City's sign regulations. Id. at 9.

On April 24, 2009, this Court issued an order dismissing Plaintiffs' action with prejudice. Id. at 1. The Court wrote:

"The sole relief that Plaintiffs are requesting (i.e., enforcement of the City's sign regulations) is already being carried out by a City agency that exists for this specific purpose." Id. at 10-11.

The Court found that dismissing the action "will allow the City Planning Commission to update and amend the directives of GASP in light of local objectives and policies, as it continues to do so from time to time." Id. ECF No. 315 ("Notice of Appeal"). On

Plaintiffs appealed.

November 9, 2010, the Ninth Circuit issued an order vacating submission "for the limited purpose of requesting the district

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court to enter an order clarifying the basis for the dismissal of this action with prejudice." See Nov. 9, 2010 Order. The Ninth

Circuit wrote that while primary jurisdiction is an improper ground for a dismissal with prejudice, the dismissal may be proper under California's doctrine of equitable abstention. Id. at 2. The

Court was directed to issue an order setting forth which doctrine the Court relied on in dismissing the action with prejudice. Id.

The Court hereby clarifies that it relied on California's equitable abstention doctrine in dismissing Plaintiffs' action. That doctrine provides: "Where [an unfair competition law] action would drag a court of equity into an area of complex economic [or similar] policy, equitable abstention is appropriate. In such

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cases, it is primarily a legislative and not a judicial function to determine the best economic policy." Shamsian v. Dep't of

Conservation, 39 Cal. Rptr. 3d 62, 78 (Ct. App. 2006) (quotation marks omitted; alteration in original). The City has established, The

through GASP, a policy of enforcing its sign regulations.

equitable relief sought could throw this enforcement policy out of balance, frustrating the City's ability to "update and amend the directives of GASP in light of local objectives and policies." Apr. 24, 2009 Order at 10-11. For the foregoing reasons, the

Court's April 24, 2009 Order dismissed the action with prejudice under California's doctrine of equitable abstention.

IT IS SO ORDERED.

Dated: November 29, 2010 UNITED STATES DISTRICT JUDGE

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